A government-ordered prohibition or limitation on trade with another country. Under an embargo, all trade, or selected goods and services, may be restricted. The Food Security Act of 1985 states that U.S. policy is: (1) to foster and encourage agricultural exports, (2) not to restrict or limit such exports except under the most compelling circumstances, (3) that any prohibition or limitation on such exports should be imposed only when the President declares a national emergency under the Export Administration Act, and (4) that contracts to export agricultural commodities and products agreed upon before any prohibition or limitation should not be abrogated. Whenever commercial export sales of an agricultural commodity are suspended for reasons of short supply, but to a country with which the United States continues commercial trade, the Food and Agriculture Act of 1977 requires USDA to set the commodity price support loan rate at 90% of the parity price. The Food, Agriculture, Conservation, and Trade Act of 1990 contains contract sanctity provisions that place constraints on the embargo of agricultural commodities from the United States. The 1990 Act also: (1) provides for agricultural embargo protection that, if certain conditions are met, compensates producers with payments if the President suspends or restricts exports of a commodity for national security or foreign policy reasons, and (2) requires USDA to develop plans to alleviate the adverse effects of embargoes if imposed. The FAIR Act of 1996 requires USDA to compensate producers of a commodity, or commodities, if the U.S. government imposes an export embargo on any country for national security or foreign policy reasons, and if no other country joins the U.S. embargo within 90 days. Compensation may take the form of payments to producers or funds made available to promote agricultural exports or food aid.
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