ontrol the farms output in order to meet market demand (Brue 662). One of the provisions of the Freedom to Farm Act was transition payment. This was done to ease farmers away from government dependency at less of a financial shock. It set a schedule of fixed payments depending on a farmers acreage that would gradually decline over seven years. Another provision to the act gave farmers the power to switch between alternative crops. If farmer x was selling corn but the demand for wheat began to grow, farmer x could then switch his production to wheat in order to take advantage of wheats higher price. However, this advantage may not hold up in the long run. While looking at the series of events for a long run adjustment, it can be seen that pattern will run as follows: 1) Increase in demand for wheat. 2) Existing farms gain profits. 3) Entry of more farms into the wheat industry (provision of Freedom Act). 4) As more farms enter, supply curve shifts to the right decreasing economic profit and price of wheat. 5) Income of all wheat farmers will be reduced. Although this provision would provide for a wider variety of products and crop prices, farmers would be adversely affected in the long run scheme.Although the origins and causes for the enactment of the Freedom to Farm act are vital to its understanding, it can be said that its effects on farmers and consumers alike are essentially more important. Government is continuously trying to improve their farming policy and form new legislation to enhance their services to the public. They can better do this by studying the effects of their past decisions. Over the past five years, the U.S. has experienced the worst farm crisis since the Great Depression (Williams 8). Although in 1997 it seemed as though things were going well, 1998 came through with plummeting prices for grain and many other farm products. Alas, farmers had already planted too many of the profitable crops, cre...
