AGEC 3703 Exam 2

The 1970s were the last ______________ of agriculture in the 20th century, with high prices and land values, easy credit and venture capital.

"Golden Age"

As the replacement farm support mechanism for helping participating producers manage risks, Crop Insurance programs began to take on a major role with the _______________

2008 farm act

Identify the order in which these events occurred: 1. Ag Marketing Act 2. Homestead Acts gain 10% of all US land for over 1.5 mil. Homesteads 3. The Great Depression began 4. Drought leads to drop in crop yields. leading to higher prices, but little to sell

4132

Nonetheless, the Southern Tenant Farmers Union formed in Arkansas in 1934 and of the ____ million farmers in the US in 1935, 2.8 million were share- croppers. Fighting big banks, big railroads, big wealthy landlords and farms, the Great Depression, the dustbowl of the dirty 30s and finally not much help even from a liberal government was almost too much to survive.

6.8

The AAA of the 1930s was both the Agricultural Adjustment Act of 1933 and the ____________________ . It continued to help large producers more than small farms, but it helped stabilize the economy by sending help to the masses and blunt unrest among small farmers, sharecroppers, farmworkers and poor city non-farmers.

Agricultural Adjustment Administration

The ______________________ was an example of one of several cattle trails that started in Texas with $2 to $10 per head ($4 in this case), traveled through Oklahoma from Red River Station, Old Duncan Store, Concho, Fort Reno, Kingfisher Stage Station, Mustang, Dover, into Kansas south of Caldwell, and sold at the railhead for $30 to $40 per head

Chisolm Trail

The 1996 farm act eliminated all except:

Mandatory Spending

Assume you're hired by the Cattlemen of America instead of DPA to evaluate the 1986 whole-herd dairy buyout impact on the beef industry. The initial likely impact would be:

Supply of beef increases, causing a decrease in beef price.

As risk management becomes more important, the crop insurance title also becomes more important. STAX remains for cotton farmers although it is not used by them as much. Regarding Hemp, the 2018 farm bill crop insurance title does all of the following except:

allows the producer to set the per pound estimated price

17th century precursor to deficiency payment mechanism

bounty payment

Support payments began to evolve to deficiency payments based on target prices, building a connection to the _______________________________.

market price for the commodity

During the 20 year period 1995-2014 the top 10 farms in Oklahoma received over ______ in farm subsidy payments

$27 mil.

The initial government response to the dustbowl of the dirty 30s was

Little more than more research

is a political activity of interest groups engaged in seeking support and/or protection from government entities such as state legislatures and in Congress.

Rent-seeking

With the passage of the 2008 farm bill, Oklahoma Agriculture as a whole found the proportion of farm subsidies coming from Crop Insurance began to _____________, and in 2014 came mostly from Disaster Assistance.

increase

a limit on the amount of a commodity that can be sold

marketing quota

The Noninsured Assistance Program (NAP)

provides payments to producers of crops for which private crop insurance is unavailable and is a federal crop insurance program.

The "safety net" programs for covered commodities were new in this farm bill. The first was called agricultural risk coverage or ARC, and the second was called PLC price loss coverage. ARC is an average crop revenue election that pays when the actual per acre revenue for the county falls below _______________________. PLC is a countercyclical price program that pays when the national average marketing your price for a covered crop such as wheat, cotton, corn, etc., falls below __________________.

the revenue guarantee; its reference price

During the 20 year period 1995-2014, over 80% of agricultural subsidy payments for Oklahoma farmers went to

the top 20% of farms in the state

More spending is projected for major conservation programs in the 2018 farm bill than in any farm bill in history, according to Dr. Hagerman. Her figures from USDA indicate that spending is projected to be between _________ each year through 2023.

$6-7 billion

1980s land policy in the form of _____________________________ with simultaneous goals to conserve land, reduce surpluses, and reduce federal budget exposure, provided a way forward out of the crisis of low prices and high debt.

0-92 and 50-92, and later the Conservation Reserve Program, Swampbuster, Sodbuster and Compliance

The Trump Fiscal Year 2018 Discretionary Budget called for $11 bil. in Food and Agriculture program spending, which was ___% of the proposed budget.

1

Dr. Hagerman showed USDA data that compared OK 2015 t0 2019. During that time period, the number of farms declined about 2% while net farm income declined about 14%. Much of that loss came from government commodity programs that were down about _____.

18%

forced Cherokees off their land, which started the Trail of Tears, resulting in their seemingly permanent settlement of a large portion of Oklahoma.

1835 Treaty of New Echota

The Cowboy West and cattle were really only dominant for about 20 years in the 1800s. That time and geographic area was the _______ in the ____________.

1860-1880; Midwest

Until the early 20th century, purchasing food, medicines and cosmetics in the market could be very risky. Contamination, toxicity, poison, addiction were real and common. While there was great reluctance for government intervention and regulation, several acts were passed to address these problems, including all except:

1922 Capper-Volstead Act

Parity became a policy tool in the __________________________, the first farm bill, and was developed by Peck and Johnson. Because of this, it is still part of the law of the land

1933 Agricultural Adjustment Act

There was a sense of a golden age in agriculture during most of the ______ where they could expand the safety net, provide more assistance to the hungry, and turn land into a speculative investment, with inflated land prices increasing about 25% per year which stopped at the end of the decade. The next decade the Fed tightened monetary policy and real farm income fell. Many rural banks and farms became insolvent, suicide rates increased, foreign demand fell, and there was a general sense of depression in agriculture.

1970s

The Target price and Deficiency Payment System replaced price support payments in _______ farm bill and remained the general support mechanism until 1996.

1973

The __________ farm act had several firsts including deficiency payments for most participating commodities, food stamps with its own title authorizing the secretary of agriculture to enter into 35 or 10 year contracts with landowners to promote the sound use of flood plains sure lands and aquatic areas and prevent erosion and pollution.

1973

included a plan to phase down government support of agriculture

1996 farm bill

This marked the beginning of the post-World War I _________________, coming almost a decade before the Great Depression of 1929,

Agricultural Depression/Recession (1920)

______________________ similar to ACRE, provides protection against shallow revenue losses, provides payments to participating producers if per acre revenues fall below 86% of the benchmark; producers can choose individual farm coverage or county level coverage and can receive a maximum of 10% of the benchmark revenue

Agriculture Risk Coverage

The agricultural improvement act of 2018, the current farm bill, is called an omnibus bill, which means it has multiple titles covering a broad range of issues including rural, farm, nutrition and urban issues, and it enjoyed

Broad bipartisan support in Congress.

The ____________________ were initially thought to be caused by "baring the land", but later scientific research indicated the primary causes were a combination of climate and coincident production practices on fragile lands. These results, it was predicted, would cause "black blizzards" of devastating proportions every 30 to 40 years. Until producers began to change those harmful production practices, that research was proven relatively accurate.

Dirty Thirties

While we now know that instability is the core farm problem, the text notes that "(D)uring the 1960s to the mid-1980s, commodity program policy increasingly became tied to reducing surpluses." To achieve this goal all of the following policy actions took place except

Environmental issues in food stamp issues for the hungry were largely ignored.

organized in the 19th century by farmers as a response to abuses by railroads and big banks

Farmer's Alliance

The opposite of the old saying "if it ain't broke don't fix it", could not be ignored even in Washington, DC. Commodity surpluses were driving down prices, trade issues complicated solutions, Federal spending more than revenue was exploding, farms were going bankrupt, and farm policies and resulting practices were being blamed for harm to the environment. Consequently, the 1985 farm act

Flex commodity program provisions which allowed producers to plant alternative crops on base acres and still receive program payments.

Lending proof to the theory of instability, there were five farm acts during the 1960s, including the _______________ Act of 1964. While assistance had been used before, this was the first farm act to make use of this mechanism as a stand-alone bill that had the dual purpose (1) to provide food and nutrition to low-income households, and (2) to reduce the farm level surplus.

Food Stamp

Hopes of the market continuing to provide high prices and good profits to producers after the 1996 farm act was passed did not come to fruition. Excess supply in the market led to low prices and low farm income and farmers began to refer to the act as ____________________, and quickly returning to Washington asking Congress to reverse their earlier requests for lower supports and less government intervention.

Freedom to Fail

The 1996 Farm Act made Flex acres permanent under the _________________ portion of the act.

Freedom to Farm

The period 1910-1914 is called the __________________ because prices were good, and times were prosperous for US farmers, and again in 1916-1920, in part because of World War I-decimated food supplies in European markets.

Golden Age of Agriculture

The Oklahoma Congressional Representative for the district that received more in commodity payments & all subsidies than all other 4 districts combined during the 20 year period 1995-2014 is

Lucas

The ___________________________ was/were intended to support domestic prices with tariffs and a corporate type farm board that would buy specified commodities when world prices were lower than domestic prices. However, these never became law.

McNary-Haugens bills

What made the Free Range "Cattle Kingdom" work for that 20-25 years included all except:

Native American looking to sell their land or form joint ventures in cattle and buffalo business

As those who felt under-served and under-represented in political discourse, the small farmers tenant farmers farm laborers continued to feel as if they were on the outside of the agricultural debate. As the nation moved toward the final decade of the 19th century, the Texas exchange took on the big banks the Dakotas Co-op attempted similar action in the northern Midwest populism which was basically this movement people that felt they were not being heard in the state governments and in Washington really fail to gain political power but they built a legacy of helping farmers and their successes were not overlooked and included all of these actions except:

Native Americans made deals with the French in New Orleans and Spanish Santa Fe to sell all the cattle and buffalo the Indians could get

The 1996 farm act provided participating producers increased ______________, which provided them the freedom to plant any crop on contract acres, except fruit and vegetables, although mung beans, lentils, and dry beans were okay.

Planting Flexibility

During this period of the early 1970s, it was ____________________ who established the Environmental Protection Agency, the Clean Air Act, the Water Bank Act and the Clean Water Act, making him the most environmental president the US has had.

President Nixon

_______________________ provides price protection when prices of covered commodities are below "reference" prices set in the farm bill, with payments if the actual prices are less than the reference prices; payments are tied to base acreage and program yields, but not current production choices.

Price Loss Coverage

Despite the large sums of government support for agriculture over the last several decades, mistrust of government can be traced back to the history of unrest among farmworkers and poor farmers during the 19th and early 20th centuries. _____________ was part of the discussion of the times among these farmers, who had had their farms repossessed, or never given an opportunity to own land, or tenant farms that kept them just poor enough that they were unable to see any future that the farm would ever be theirs.

Revolution

The big four categories mentioned by Dr. Hagerman in the current farm bill include all except:

Rural development

The early to mid-20th century was a time for the private sector to begin to industrialize agriculture and for public policy to use

Science as its foundation for investing in agriculture

According to Knowlton, what finally brought about an end to this remarkable movement of thousands of head of cattle included all except:

Shrewd Native American entrepreneurs successfully forged alliances with the French in New Orleans and the Spanish in Ensanada and Altamira to move all the cattle they could get.

______________________is a shallow loss program that covers county-wide losses and complements a producer's individual insurance policy; requires producers to purchase an underlying insurance policy; boosts participant coverage to 86%.

Supplemental Coverage Option

Assume you're hired by the Dairy Producers of America to evaluate the 1986 whole-herd dairy buyout impact on the dairy industry. The initial likely impact would be:

Supply of milk decreases, causing an increase in milk price.

Industrial hemp qualifies, by a narrow definition, for legal movement, crop insurance, loans, etc. the key part of the definition is that

THC concentration be not more than 0.3 % on a dry weight basis.

The 2002 farm bill returned to a ________________________ after the1996 program broke all records in commodity support in 2001 paying over $29 bil. & over $28 bil. in 2002.

Target Price-type support program

Upton Sinclair wrote _________________ in 1906 describing terrible conditions in livestock slaughter facilities, not only with the food safety issues, but labor treatment, especially child labor. During the 1890s-1920s, Sinclair and other investigative journalists known as "muckrakers", shed light on intolerable conditions of both food processing and human labor.

The Jungle

Anti-competition practices were targeted by all except the

Vreeland-Wallace Act

The Food Security Act of 1985

attempted to reduce commodity surpluses and federal budget exposure through options that included 0-92, 50-92, and PIK

The boom in high commodity prices and land prices of the 1970s turned into a bust in the 1980s. Farms and rural communities were in crisis, with over-investment in agriculture and land, and the high debt leading to

bankruptcies, foreclosures, suicides, abuse, and bank closures.

As the nation moved toward the end of the 20th century, more interest groups began to take an interest in agriculture, including environmental and nutrition groups. There was more legislation passed focusing on environmental and food safety legislation for example. The terms "food" and "consumer" began showing up in farm bill titles. It was no longer enough to care for wind and water erosion of the soil with conservation regulations and programs, there were also regulations to protect the plants, soil, surrounding environment, and workers from the _______________ used in the production of crops.

chemicals, such as pesticides, insecticides, fungicides, and rodenticides

Trade issues were seldom of much interest in the farm bill. However, with the 2002 farm act there were attempts to satisfy the trade agreements that were ongoing at the time. These related to changes in the General Agreement on Tariffs and Trade being changed to the World Trade Organization, and a series of_________________________________________________________________________________________________. Green Box subsidies were non-trade distorting, Red Box were so trade distorting they must be terminated, Blue Box were minimally so and Amber Box were distorting but ok within limits. These were what negotiators focused on and spent years deliberating.

colored boxes to categorize domestic policies being identified as to their level of trade distortion in the market

The agricultural crises of the 1980s was a time of transition in agricultural policy: phaseout of allotments and quotas, widespread shift to the target price-deficiency payment system, commodity loans based on world market price, and use of ___________________ programs with the triple purpose of environmental protection, surplus reduction, competitive pricing.

conservation

The 2014 farm act continued to support land policy, but to a lesser degree: 23 conservation programs were combined and/or repealed into 13 programs; CRP enrollment was to be reduced to 24 million acres by 2017; there was a new program for grassland management authorize up to 2 million acres; to refocus 50% of conservation funding from environmental protection to a working farmlands focus; and finally conservation compliance continued to be a part of requirements for any acceptance of government funding and that continued to be so for

crop insurance subsidies

In considering what you learned about legislation discussed in these questions above, the two most basic changes were (1) the foundation was laid to transition from crop subsidy payments to risk management through _______________________________________ and (2) begin to transfer relatively more Federal funds to food and nutrition programs and relatively less to farm program support payments.

crop insurance/disaster assistance programs

Because the 2002 farm act __________________________ program payments from production decisions, it was technically possible for a landlord to take over farming from land tenants and collect all of the farm program payments. Language was included to attempt to prevent this but it was legally difficult to do so.

decoupled

Production risk

derives from the uncertain natural growth processes of crops & livestock; weather, disease, pests, and other factors affect both the quantity and quality of commodities produced.

The 21st century ushered in legislation such as the 2000 ARPA helping define, clarify and expand risks faced by producers and subsidized by government. The 2002 farm bill made basic changes in base and yield updates. Low prices had a formula safeguard in CCP payments which provided protection for price protection. Then, 2008 brought more fine-tuning of risk management with ______________________ made permanent (SADA) and subsidized crop insurance continued, ACRE provided systematic income risk protection with price and yield covered (especially for Midwest corn/soybean farmers) , organic and livestock assistance

disaster assistance

One of the smaller but important titles in the current farm bill exists to help beginning producers get a hand up for farming and ranching. Government funds are set aside to assist private bankers in providing loans or FSA loans to all these beginner categories except:

farmers in other countries

Risk Management Strategies identified in lecture 5b notes included all except:

increasing the farms debt load beyond what the bank will cover

Net Farm Income

is forecast to be nearly $103 billion this year, in part because of estimated government payments of $37 billion

Dr. Hagerman included ad hoc direct payments made to farmers in 2018 and 2019 with Market Facilitation Program (MFP) payments to counter "unfair" trade practices (mostly with China). Net farm income's contribution from government in 2020 ________________________. Beyond the regular farm bill payments these included assistance that may not be complete to counter the impact of Covid-19, effectively making revised direct government payments nearly $40 bil. (over 35%) thus far in 2020.

jumped to the highest its ever been

Oklahoma CRP now has about 638,000 acres, most of that in Western OK, with recent average rental rates about $33/acre. One of the long-term goals of CRP was to take marginal land out of crop production permanently. Nationwide, that has not been the case, but in OK, land coming out of CRP contracts has stayed out because of

low productivity and high erodibility.

The 1933 Agricultural Adjustment Act tax provisions to self-support operations of the CCC were declared unconstitutional by the US Supreme Court. Subsequent legislation

managed to correct the questionable provisions and restore constitutionality.

initiated by industry to help provide stable markets for a variety of agricultural products it is a binding regulation for the entire industry in the specified geographical area once it is approved by the producers and the secretary of agriculture

marketing order

a limit on the amount of a commodity that can be produced by assigning a proportionate share to producers

marketing quota

While farm program participants have always wanted simplicity in administration and qualification for program support, the nature of their demands require _________________ specific, complex rules with exemptions.

more

the current commodity price that is equivalent to the 1910 1914 price to restore purchasing power

parity price

The Livestock Indemnity Program (LIP)

pays 75% of the market value of applicable livestock death in excess of normal mortality due to attacks by animals reintroduced into the wild by the federal government, adverse weather such as hurricanes, floods, lizards, disease, wildfires, extreme heat, and extreme cold.

farm bills for 1938 1948 and 1949; when a farm bill reaches its termination point without being extended or replaced farm policy reverts back to one of these three bills

permanent legislation

Agricultural public policy, according to Novak & Sanders is defined as: ______________________________________________________________ _________________ agricultural commodities, transport/distribution of agricultural products, financial aspects, of agricultural food cost, safety and feeding programs, water/air quality, international trade, chemical use, disease prevention, research/education, and rural America.

principles that guide government in whatever it chooses to do or not do with respect to

However, the good times of the 2 periods of 1910-1914 and 1916-1920 sent signals to the market for producers to _____________, only to see the good times end by harvest time in 1920.

produce more

The Livestock Forage Program (LFP)

provides compensation to eligible livestock producers suffering grazing losses for covered livestock on land that is native or improved pastureland with permanent vegetative cover or is planted specifically for grazing; the grazing losses must be due to a qualifying drought condition during the normal grazing period for the county; the 2014 farm bill makes LFP permanent.

placing animal in isolation until deemed safe or found to be contagious/unsafe & treated/disposed of

quarantine & inspection

The 1985 Act replaced _______________________ with FSA-established yields and base acres, primarily to bring stability during times of crisis and control government spending. But base also has its shortcomings. Farmers built base during times of high market prices, increasing supplies and increasing environmental damages. Because program payments are capitalized into land values this also drove up land values making beginning farm or entry more difficult.

quotas & allotments

Participation in farm programs remains voluntary. However, when producers choose to participate they are required to follow certain rules. Because of this procedure, they have increasingly perceived farm policy support as

regulation

contract between tenant and landlord with crop crop divided as specified to pay for rent

share-cropping

SNAP became even more important during Covid-19 because it provided the structure for Congress to

supplement funding for school lunch programs and expanded family lunch programs to communities in need

Activities and actions that were not specifically targeted to agriculture or part of farm bills came to have major implications for agriculture. These included all except the following

the Environmental Protection Agency (EPA) was established by a Democratic administration to regulate private business