Park Agricultural Policy : Pre - and Post - FAIR Act Comparisons by Bruce L . Gardner

The 1996 FAIR Act was a novel departure in farm policy, with fixed payments, absence of acreage set-asides, and avoidance of CCC commodity stockpiles that provide a possible means of transition to a market-based agriculture. Some now argue that the FAIR Act has failed, on the grounds that the federal government has spent too much, while at the same time this spending is not effectively targeted at situations and people where help is most needed. This paper analyzes the welfare economics of FAIR Act commodity programs in 1999-2000. While the FAIR has not been a sterling example of policy at its finest, in terms of net social benefit it is an improvement over the target price and acreage reduction approach which preceded it.