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southern MN | And the set aside came about because the govt wanted to help because of low grain prices. Because of world economies, and 2 grain embargoes by the USA stopping exports from the USA, other countries stopped buying from us - grew their own or developed land in South America.
So the USA govt in an effort to help started buying up extra bushels of grain as a price support.
They gave some away, stored some, paid farmers to store the extra they bought.
And the more the govt bought, the more we grew, and the lower the prices went because buyers knew all this grain was sitting around and had to be used someday by someone. So the buyers didnt have to move the market. And growers needed to up their yield per acre to make anything at the lower prices. We had a fixed price, the only way to beat inflation was to try to produce more.
It was a disaster of a death spiral caused by the govt wanting to help after the govt stopped up our markets.
Took the set aside programs and the drought of the late 1980s to use up the grain sitting around and get closer to free market pricing.
I said closer...... ;)
That is the farm program in a short nutshell from the 1960s to present.
Paul | |
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Fsa base acres
