BASIC PROVISIONS OF 1973 FARM ACT - Target price, payments, and compliance rules for 1974-1977 crops

Oct 6, 2026

The document outlines the basic provisions of the 1973 Farm Act for the 1974 through 1977 crop years. It explains that no feed-grain planting restrictions or conserving-base set-aside requirements apply for 1974, while target prices govern wheat, feed grains, and cotton. It details how government deficiency payments are triggered when market prices fall below target levels, and summarizes non-recourse loan rate adjustments, cotton and dairy support levels, production incentives, and payment eligibility limits.

LanguageEnglish

CategoryHealthcare

FormatPDF

Pages2

Reading Time5 min

AccessFree to download

Basic provisions of the 1973 Farm Act

Target prices and deficiency payments

Wheat rules and loan/processing changes

Feed grains target and loan rates

Cotton program and production goals

Dairy price support level

BASIC PROVISIONS OF 1973 FARM ACT No feed grain planting restrictions orconserving base set-aside requirementsare in effect for 1974.A1974 feed grainallotment of 89 million acres has beenestablished only for computing deficiencypayments if required.Producers maysubstitute other crops to preserve theirfeed grain allotments and remain eligiblefor payments under the target price pro-gram. The target prices specified in the billapply to the 1974 and 1975 crops.Thelegislation ncludes a arget price esca-lator provision for the 1976 and 1977crop years.Adjustments to reflectchanges in farm production costs andper-acre yields from 1975 to 1976 will beused to calculate 1976 target prices.Asimilar modification will be made in1977,based on the adjusted 1976 targetprices. JAMES G.YOUDE N AUGUST 10,1973,President NixonUsigned into law the"AgriculturalConsumer Protection Act of 1973”(S.1888).Commonly known as the 1973Farm Act,this legislation replaces theAgricultural Act of 1970,which expiredon December 31,1973. This four-year bill applies to the 1974crop and remains in force through the1977 crop.It encourages maximum pro-duction of wheat,feed grains and cotton.Its objective is substantially differentfrom the 1970 act,which had as a pri-mary goa]the reduction of surpluses andsupport of farm incomes through incen-tive payments to farmers to set aside por-tions of their crop land.Under the 1973act annual payments to individual farm-ers under one or more of the individualcrop programs are limited to $20,000 perperson,as compared with $55,000 percrop under the 1970 act.Individual eligi-bility requirements correspond with thosein the 1970 act.There are no acreageset-aside programs for any commoditiesduring the 1974 crop year.However,pro-duction-adjustment authority is retainedfrom the 1970 act,should it be needed inthe future. Cotton Wheat The 1974-75 target price for wheat is $2.05 per bushel($3.42 per cwt),41%below the average U.S.farm price inJuly-August 1973.During each of the1967-72 crop years,however,seasonaverage farm prices were below $2.05per bushel.Although the 1974 nationalacreage allotment is set at 55 millionacres,its only purpose is to calculategovernment deficiency payments if theybecome necessary next year.To calculatethe number of bushels eligible for thepayment,multiply the farm allotmentby the projected yield established forthe farm.There are no set-aside or con-serving-base requirements—maximumproduction is encouraged.Producersmay substitute any crop(except thosewith marketing quotas)to preserve al-lotments and still be eligible for targetprice payments.Non-recourse loan levelsare increased from $1.25 to $1.37 perbushel of wheat.The 75c per bushel pro-cessing certificate is no longer required.It is estimated that this policy changewill reduce wheat processors’procure-ment costs by about $400 million peryear. For wheat,feed grains and cotton,the1973 act establishes "target"or guar-anteed prices that are in effect the lowestprices producers can expect to receive.When market prices are above the targetprices during a specified five-month pe-riod of the crop year,no government pay-ments will be made to producers.If mar-ket prices drop below the target prices,however,government deficiency pay-ments reimburse the producer for the dif-ference,resulting in per-unit returnsequal to the target prices. Feed grains Target prices for the 1974 and 1975crops are:(1)corn,$1.38 per bushel($2.46 per cwt.);(2)grain sorghum, The apparent intent of the target priceconcept is to encourage U.S.farmers toincrease production in the face of strongworld demand for food and fiber.At thesame time,government payments to ag-ricultural producers should decline dur-ing periods when market demand-supplyforces result in relatively high prices.Forexample,U.S.farm prices for wheat andcorn were above the target prices in Julyand August of 1973,while cotton pricesreceived by farmers during those monthswere slightly below the target price.F

FAQs

What does the 1973 Farm Act change for the 1974 feed grain program?

For 1974, there are no feed grain planting restrictions or conserving-base set-aside requirements. A 1974 feed grain allotment is used mainly for computing deficiency payments if needed.

How are deficiency payments determined under the target price system?

Target prices set the lowest prices producers can expect. When market prices during a specified five-month period are above target levels, no government payments are made; if market prices drop below targets, deficiency payments reimburse the difference.

What are the key target price and loan rate adjustments described for wheat and feed grains?

For wheat, the 1974-75 target price is $2.05 per bushel and the non-recourse loan level increases from $1.25 to $1.37 per bushel. For feed grains (corn, grain sorghum, barley, oats, and rye), the document lists revised non-recourse loan rates and corresponding target prices for 1974 and 1975 crops.

Oct 6, 2026

Uploaded by Olivia Brown