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April 20, 2001
In the past three years, Congress responded to potential sharp declines in farm income and adverse weather by providing nearly $25 billion in supplemental assistance to farmers and ranchers, greatly limiting the farm financial stress they would have otherwise faced. These payments, plus payments authorized under the 1996 Farm Act, pushed government payments to a record-high $22 billion in calendar 2000 and Commodity Credit Corporation (CCC) outlays to a record $32 billion in fiscal 2000.
In fiscal 2001, lower government payments are projected to
reduce CCC outlays to slightly over $20 billion. Had Congress not provided
nearly $9 billion in supplemental assistance in 2000, net cash income would
likely have fallen to $47.5 billion in calendar 2000, the lowest since the
farm financial crisis of the mid-1980s. Instead, net cash income reached $56.4
billion in 2000, nearly $2 billion above the average of the 1990s.
Source: Agricultural Outlook, April 2001
Americans continue trend
of spending less on food
In 1999, 10.4 percent of household disposable personal income was
spent on food, down from 11.4 percent in 1990. Households spent 6.2 percent
of their 1999 disposable personal income for food at home and 4.2 percent
on food away from home. A decade earlier, Americans spent 7.2 percent of their
disposable personal income for food at home and 4.1 percent for food away
from home.
Source: Food Review, Vol. 23, Issue 3, Sept.-Dec. 2000
Japan is changing agricultural
policies
Japan is the world's largest importer of agricultural products
($33 billion in 1999).
Japan's government is revising its agricultural policies and programs to stem the decline in self-sufficiency in food production, and to ensure that its farm program expenditures will be exempt from reductions required under World Trade Organization rules.
In July 1999, Japan adopted the Basic Law on Food, Agriculture, and Rural Policy, to review postwar agricultural policies and set up a policymaking scheme based on four principles: securing a stable food supply, fulfilling the multiple functions of agriculture (e.g., use of rice paddies to control flooding), sustainable development of agriculture, and promotion of rural areas.
Major initiatives are underway to change the structure of
farming and to make it more efficient. Japan's new policy stance explicitly
recognizes that food security depends on continued imports and available stocks,
as well as on maintaining domestic production capability.
Source: Agricultural Outlook, April 2001
Farm value of food dollars
is 20 percent
Out of each dollar the consumer spends for food, farmers and ranchers
receive 20 cents while labor gets 39 cents; packaging, 8 cents; transportation,
4 cents; energy, 3.5 cents; profits, 4 cents; advertising, 4 cents; depreciation,
3.5 cents; rent, 4 cents; interest, 2.5 cents; repairs, 1.5 cents; business
taxes, 3.5 cents; and other costs, 2.5 cents.
In summary, marketing costs accounted for 80 percent of total consumer food spending, while the farm value comprised the remaining 20 percent. Marketing costs rose 45 percent between 1990 and 1999. Source: Food Review, Vol. 23, Issue 3, Sept.-Dec. 2000
