The most regulated industry in the United States has always been agriculture. During the twentieth century, the state regulation of agriculture and agribusiness in the United States was distinguished by two characteristic features (Cheng et al., 2021). First of all, the state by its intervention does not suppress the activity of farmers and agro-industrial firms, but creates equally competitive opportunities for all agribusiness enterprises. Secondly, the consequences of real-life governmental price control are the evolutionary nature of transformations in this sphere.
Prices are supported in industries that are highly susceptible to the destabilizing influence of the world market and occupy an important place in the structure of farm incomes. These include the production of wheat, rice, feed grains: corn, sorghum, oats and barley (Cheng et al., 2021). In addition, the state regulates the ceiling and floor price of cotton, soybeans, tobacco and peanuts (Cheng et al., 2021). Peculiar forms and methods of regulation have developed in the production of milk, fruits, vegetables, beef and poultry (Cheng et al., 2021). The main method of maintaining farm income in the United States is the system of compensation payments.
Grain and cotton producers receive special payments from the government to cover the difference between target and market prices (Cheng et al., 2021). The sizes of target prices are set by the Congress by calculation. In relation to corn, sorghum and barley, direct payment for the reduction of acreage is also practiced. In addition, farmers who withdraw from circulation to the deposit receive an additional payment to the market price (Cheng et al., 2021). The result of the process is a guarantee of a minimum level of income for farmers. The Congress also determines a fair level of control prices for milk, butter and cheese (Cheng et al., 2021). Subsequently, this allows the state to allow mass buying of products if market prices fall below this level. It uses them for free breakfasts for schoolchildren, assistance to the poor, food aid to underdeveloped countries, and also sells them to other states.
Reference
Cheng, K. W., Feng, C., & Zhang, Y. (2021). Land price control and employee wages: A bunching analysis of factor cost transfer. growth and change, 52(4), 2477-2508.