The incentive payments are direct payments made under the
National Wool Act
The National Wool Act of 1954 (Title VII of Agricultural Act of 1954 (P.L. 83-690)) provided for a new and permanent price support program for wool and mohair to encourage increased domestic production through incentive payments.
Wool and mohair c ...
(P.L. 83-690, Title VII) to producers of wool and mohair, which were similar to
deficiency payments In the United States, deficiency payments are direct government payments made to farmers who participated in annual commodity programs for wheat, feed grains, rice, or cotton, prior to 1996.
*The crop-specific deficiency payment rate was based on th ...
made to producers of grains and cotton. The incentive payment rate was the percentage needed to bring the national average return to producers (the market price plus the incentive payment) up to the annually set national support price. Each producer's direct payment was the payment rate times the market receipts. Producers with higher market receipts got larger support payments. This created an incentive to increase output and to improve quality.
The wool and mohair commodity programs ended after the 1995 marketing year as required by P.L. 103-130. The
2002 farm bill
The Farm Security and Rural Investment Act of 2002, also known as the 2002 Farm Bill, includes ten titles, addressing a great variety of issues related to agriculture, ecology, energy, trade, and nutrition. This act has been superseded by the 2007 ...
(P.L. 107-171, Sec. 1201) made wool and mohair eligible for marketing assistance loans and loan deficiency payments. For conservation programs, incentive payments refer to cost-sharing payments that producers may receive to attract participation. In some programs, the federal portion of these payments can vary; for these programs, the higher share is provided for the more desirable conservation practices that will provide greater benefits.
References
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{{DEFAULTSORT:Incentive Payments
United States Department of Agriculture
Payments