The 1985 farm bill sets per-bushel target prices, which are supposed to represent a fair rate of return on production costs for those crops through 1990. Farmers receive federal "deficiency" payments to cover shortfalls between the statutory targets and actual market prices. Existing law would cut wheat and feed grain target prices by 2% in 1988, 3% in 1989 and 5% in 1990. [Reagan] proposes cutting those target prices by 10% each year, saving more than $23 billion.

In such a circumstance, they say, the need for federal deficiency payments would disappear, saving billions in income subsidies. However, food costs would rise for consumers and the government would have to heavily subsidize exports for them to compete in world markets. Also, tariffs would have to be imposed on grain imports from Canada and elsewhere to prevent U.S. beef and pork producers from buying cheaper foreign grain at the expense of U.S. growers.

In contrast with Reagan, [Rudy Boschwitz] and [David L. Boren]'s decoupling plan proposes doing away with target prices altogether, replacing deficiency payments with lump-sum payments based on farm size and phased out over a period of years.