Studied by 4 people
Farm commodities
Wheat, soybeans, cattle, rice, etc.
Food products
Items sold through restaurants or grocery stores
farm products
Demand for ________ has increased slowly, because it is inelastic with respect to income.
Agribusiness
Large corporate farming firms
Parity concept
Year after year for a fixed output of farm products, a farmer should be able to acquire a specific total amount of other goods and services; relationship between the prices received by farmers for their output and the prices they must pay for goods and services should remain constant
Parity ratio
Ratio of prices received to prices paid, expressed as a percentage
Price supports
Gov’t price floors on farm products
Acreage allotments
In return for guaranteed prices for their crops, farmers had to agree to limit the number of acres they planted in that crop
Freedom to Farm Act
Ended price supports and acreage allotments for wheat, corn, barley, oats, sorghum, rye, cotton, and rice
Food, Conservation and Energy Act of 2008
Current subsidy programs continue the “freedom to plant” and “direct payment” approaches to farm policy but make direct payments permanent and provide revenue protection for farmers. The revenue guarantees kick in automatically when crop prices (or total revenues) fall below targeted levels
Direct payments
Cash payments are fixed for each crop based on a farmer’s historical pattern of production and are unaffected by current crop prices or current production
Countercyclical payments (CCPs)
Based on previous crops grown and are received regardless of the current crop planted
Marketing loan program
Farmers can receive a loan (on a per-unit-of-output basis) from a government lender
Note 
Flashcard (23)