The U.S. farm bill has played a very important role in protecting producers from rapidly changing economic conditions across the world since 1933. The purpose of the farm bill has been to stabilize net farm income from weather and commodity market uncertainty.
The U.S. Congress should pass another farm bill in 2012 to replace the current farm legislation (2008 farm bill). However, economic conditions under which the 2012 farm bill is being discussed are different from previous farm bills.
In 2002, corn prices averaged $2.32 per bushel and there was a federal budget deficit of $410 billion. Today, corn prices are averaging $6.60 per bushel and there is a federal budget deficit of $1.1 billion. Commodity prices have increased significantly since 2008. High commodity prices, along with the large federal budget deficit, could make it difficult to formulate a new farm bill