Corny

Corn production in America experienced heavy regulations by the government between the time of the New Deal and the policy changes promoted by Agricultural Commissioner Earl Butz in 1973. The government protected and regulated supply of agriculture through the use of price floors that guaranteed “fair” prices for corn. Excess corn was stored in reserves as a way to deal with “overproduction.” In 1973, Agricultural Commissioner Earl Butz changed the American economy for food production drastically, implementing a system that essentially told farmers to produce as much as they could, allowing the “free market” to determine prices.

Before 1973, American agriculture was strongly centered on small and medium sized family farms. The government invested in subsidy programs that regulated how much and where farmers could grow their crops. Thus, farmers were taken care of by the government, encouraged by price floors to produce and sell, but only within the constraints that the government allowed them to produce at. Essentially, every farmer produced and sold the same product in the same way.

After 1973, the agricultural industry became cut throat. If a farmer could buy out his neighbor, he would because it would be economically beneficial. Butz saw overproduction as a positive factor for the economy. The increase in corn production after 1973 led to the decline and near extinction of the family farm. Corporations began to run farms, producing as much as possible and attempting to always sell at free market equilibrium price. By 1996, the Freedom to Farm act stated that all price floors would be removed permanently, allowing “farmers” to produce without government intervention. It didn’t work. Prices collapsed and the government had to step back into agriculture, bailing out thousands of farms across the country.

The agricultural economy in America has experienced many twists and turns in regards to government regulation and intervention. The concept of Price Control will always be topically relevant when discussing American farming due to the fact that farming can simply not operate efficiently in the free market system without price control by the government. After 1973, corn production in America rose so drastically, new ways of sweetening food adapted to the use of corn. Nearly everything in the supermarket today contains some trace of corn due to its massive overproduction within the last forty years. However, lack of government price control failed to protect the farmers and the price of corn. Price eventually dropped too low that corporate farming companies began to control farmers, the ones who were actually producing the crop. In the end, price control by the government protects the mutually beneficial transactions between farmers and consumers.