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History of farm subsidies
Major government involvement in the farm economy began in 1929, when President Herbert Hoover (1929-1933) created the federal Farm Board. The board had trouble meeting the growing challenges of the Depression, but its creation represented the first national commitment to provide more economic stability for farmers.
The next president, President Franklin D. Roosevelt, moved national agricultural policy far beyond the Hoover initiative. Roosevelt created, and Congress passed, laws designed to raise farm prices by limiting production. They also guaranteed farmers a "parity" price roughly equal to what prices should be during favorable market times. In years of overproduction, when crop prices fell below the parity level, the government agreed to buy the excess.
These subsidies continue to this day, but they have a new effect on the global marketplace.
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Article Posted on: 8/5/2006