Preface

Debate on the future direction of U.S. farm policy is intensifying in the lead up to the passage of the 2007 Farm Act. Many producers, the administration, trading partners, and other interest groups are calling for change. At the same time, current farm policies face growing competition for funding.

Much of the pressure for change reflects the fact that modern agriculture and its markets are very different to those in the 1930s when the federal government began large-scale interventions in the sector.

U.S. agriculture is no longer dominated by small-scale operations, mired in poverty, facing saturated markets with little prospect for growth. Today’s farms are large, sophisticated and efficient. Operators of commercial farms enjoy average incomes more than three times the U.S. average. The outlook for future farm prices and income is strong, primarily due to demand from the renewable fuels sector.

These structural and market changes, and the benefits that would come from concluding the Doha Round, have led to calls for U.S. farm policy reform.

The upcoming 2007 Farm Bill debate represents an important opportunity to address the sector’s future challenges—to move away from policies that constrain the future of U.S. agriculture, and toward those that would place the sector in a much better position to realize its vision of growth and prosperity.

This study asks whether current U.S. farm policies best serve the interests of America’s farmers and ranchers. It aims to stimulate debate on policy options to meet future economic, environmental and social needs, and describes market-oriented policies that would better support the future development and competitiveness of U.S. agriculture.

This study does not attempt to assess USDA’s recently released 2007 Farm Bill
proposals, as to do so would have been outside its mandate. It expands the information on possible options for achieving reform the 110th U.S. Congress has to draw upon in its deliberations on the future direction of U.S. agricultural policy.
 

This study was commissioned by the Government of Australia—the Chair of the
Cairns Group of agricultural exporting countries.

The entire research paper in pdf form

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