A key issue framing debate on the 2012 farm bill is whether farm supports should be market oriented or fixed by Congress.

The issue is most clearly seen in the debate over target prices fixed by Congress vs. a shallow loss program, such as ACRE, with assistance levels tied to market revenue.

Similar debates have occurred throughout the history of U.S. farm policy.

The article linked below first reviews these historical debates, often referred to at the time as a debate over flexible vs. fixed farm supports. An explanation is then proposed for why the U.S. has consistently chosen flexibility and market orientation.

The article then discusses the 2012 farm bill debate.

 

Continue reading Market Oriented vs. Fixed Supports and the 2012 Farm Bill