The US government regulates the trade of agricultural products under the Agricultural Marketing Agreement Act of 1937, which gave the federal government authority to set prices and other conditions for 30 vegetables, fruits, dairy products and other agricultural items. The stated intention of the act was to ensure fair trading practices, but critics of the regulations claim it drives prices higher for consumers. For example, each year, a government agency known as the Raisin Administrative Board confiscates portions of raisin farmers’ crops in order to control the market supply. In 2013, some US raisin farmers questioned the constitutionality of the government confiscating their crops without paying them, and the issue was taken to the Supreme Court.
More about US agricultural products:
- In 1986, the cherry industry’s administrative board was disbanded, but it was voluntarily reinstated at the request of cherry farmers in 1996 after prices dropped to historic lows because of overly high supplies.
- The Organization for Economic Cooperation and Development has concluded that US regulations on dairy increase milk prices by more than 25% for consumers.
- The US sugar supply is regulated in that 54% must be produced as beet sugar and 46% as cane sugar.
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Discussion Comments
The answer to all the problems in America is term limits.
@irontoenail - Yeah, I don't mind regulations as long as they are sensible and they are for the good of both the farmers and the consumers. But I don't think long term subsidies work.
Without regulation, we'd all be eating food from overseas. China can produce agricultural products much more cheaply than most western countries and they already provide a huge amount of food for those countries. Without regulation, they could take over the whole market, which would leave our farmers out of jobs.
@anon340147 - I don't know much about economics, but I do know that it's rarely simple. And in the States there are definitely a lot of farming organizations that wield a lot of power.
I don't think the laws are always put in place to protect the consumer, which is a shame. I do think the farmer needs protection as well, but only within reason.
It seems like the government puts a lot of money into subsidizing agriculture business, such as the production of corn and meat products, which actually lead to them being placed in a lot of processed food. This, in turn, leads to an increase of obesity in the general population. And the government has to spend money on that as well! Doesn't seem very efficient to me.
Don't you people in the USA have farmers and consumers organizations that can check and balance the farmers'/producers excesses? I find it ironic that the government that claims to promote democracy firsthand worldwide turns against her citizens with such a draconian hand. Why can't the government not buy the excess produce from all the concerned farmers and stock or otherwise to control the excess and help keep prices stable? Just a thought!
Come to think of it, the government's hands are kind of dirty. It kind of made me feel a little furious reading these facts thinking, "Food should be priced to sell at whatever cost is suitable for the farmer with allowances varied to suit the transportation and sale of such foods in the market".
There must be some sort of reasoning for this kind of regulatory control. If the market were more open and less regulated, then how would that impact on the reliability of produce/cherries being able to be supplied to consumers? If one farmer is allowed to sell/trade his produce directly to the public, and the other retailers who have to facilitate this competition are driven out of the market, then what happens to the overall availability?
My guess is that the market would become very unstable and retailers would crumble at the foundations due to inconsistent business.
And just why does the government have to have their nose and hands into everything, especially when it comes with a promise to save money or 'level the playing field'. It never works. It seems that the majority of these hare-brained ideas end up costing us, the taxpayers a ton of money. Let's take "The Affordable Care Act", (a.k.a. Obamacare). Need I say more?
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