I was taking an online quiz for my economic 2 class, and I missed a question about 1996 farm act. The question asked:

     

The 1996 Farm Act:

           A)      Increased the amount of farm subsidies from the federal government

                 Called for deregulation of the farm industry

           C)      Called for a phase-out of farm subsidies

           D)      Raised price floors for farmers

I picked (, however, I was wrong. The answer was ©. I'm sitting here scratching my head trying figure out different between deregulation and "phase-out" subsidies.

Here what my notes tell me about 1996 farm act (this from a powerpoint giving by the professor)

In 1996, the Federal Agricultural Improvement and Reform Act made two radical changes in farm policy

Target prices and their associated deficiency payments were terminated.

Many restrictions on acreage set-asides were eliminated.

.

and it also says

Farmers no longer have to keep set-aside acreage completely idle or grow only specific commodities.

The notes also talks about government no longer used set-aside programs, etc. So this sounds to me that government is deregulating all the prices and specific output a farmer can produce, thus, this is deregulation. How is elimination of subsidy not same as deregulation?

Regulation means the government decides what output and prices the producer is required, my notes says about 1996 freedom to farm act, the market no longer had to follow government's price floor, nor the farmers had to produce a certain output.

Ouch! My poor brain.   :-[

Ouch! My poor brain. :-[

How do you think I feel? I had take a quiz on environmental economic. How government can regulate pollution while still encouraging economic growth. I made 80% on that quiz, it was total b.s. I learn something interesting though, it call a "tradable pollution permit" If any firm keeps their pollution level lower than government standard, they receive credit, which they can sell to other firms which gives buyer of the permit ability to pollute at certain level. I hate that chapter, lol.