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How Did The New Deal Affect The Cost Of Corn Farming

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For several years the government has played an active role in farming. Beginning with the New Deal, which allowed farmers to take out loans with their corn as collateral until grain prices increased. The New Deal helped maintain stability and security for corn production until campaigns to abort the new farm plan took over. After the New Deal the current system of deficiency payments came into effect around 1973. Deficiency payments encouraged farmers to sell their grain for a low cost because farmers believed the government would pay them for its true worth. The result of government interference with agriculture has benefitted the agribusinesses and mass production companies instead of benefiting the family farmers. The New Deal was originally put into effect because the government feared that farmers would be put out of business because grain prices were so low. This deal provided a safety net for farmers who could receive loans until corn prices went up. With the New Deal in effect farmers began producing more corn despite the falling price of corn. Due to the New Deal the price of corn didn’t collapse but there was an over abundance of corn and prices continue to go down. The New Deal provided a surplus to build in case of a bad year and the government was able to “pay for the farm programs and smooth out the …show more content…

The subsidies handed out from the government only encouraged farmers to sell their grain for an extremely low price and try to produce more corn. Farmers thought the government would make up the different but the government could only replace so much and farmers where unable to break even. Target prices were lowered and farmers weren’t receiving enough for their grain once again. These subsidies are really only helping big production farms that continue to squash the efforts of small family

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