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Farm Bill Tragedy in the Making

By Jim Chen at al.

Feeling a little like Alice in Wonderland, I consider recent proposals to fix the farm bill impasse: cut small family farms out of the payment programs, and get that highly erodible ground we have been using for wildlife habitat back into production.

First, a quick overview, and then the new, and shocking, developments - things seem to be going from bad to worse.

Farm Bill negotiations are stalled. House and Senate agriculture committees were assured their baseline budget of $213 billion dollars for their 5 year plan.

The vast majority of federal farm program support (over 80%) has always gone to just five crops - corn, wheat, cotton, soybeans, and rice). Despite record high prices for most of these commodities, Congress has been unwilling to decrease the amount of federal support associated with these crops. In fact, current negotiations provide for an increase on the maximum direct payment, from $40,000 to $60,000. These payments go to the farmer without any strings attached - regardless of how high prices are.

Facing sharp criticism that this expensive support only goes to forty percent of farmers, with others who produce non-program crops receiving nothing, Congress decided to buy-off farm bill detractors. New programs were added to the bill. The result - a bill that is now $10 billion over its target of $213 billion dollars.

The Bush administration, along with some in Congress, have been working for reforms. For example, as described in a recent post, they have (to date unsuccessfully) sought to put a reasonable cap on the adjusted gross income for payment recipients. They have tried (to date unsuccessfully) to address all aspects of the programs that violate fair trade, despite the fact that we are losing cases before the WTO, and despite the fact that our programs are devastating poor cotton producing countries in Africa.

The most recent news reveals two even more disturbing developments.

1) House Ag Committee chair Colin Peterson has suggested that the best way to cut the budget is to amend the definition of farmer so that we can cut off commodity support payments to small and part-time farmers. Many of these are beginning farmers and minority farmers, and almost all are family farmers. Peterson proposed eliminating them from the program, while continuing to provide government hand outs to the wealthiest of farmers - farmers who should be able to run their businesses without taxpayer dollars.

2) Attempting to address the problem of high food prices, the American Bankers Association is lobbying hard for dramatic reductions in the Conservation Reserve Program (CRP) to put more land in production. This is the program that pays farmers to take highly erodible land out of production. This is land that for environmental reasons should not be farmed anyway. The bankers do not want crop subsidies cut, as they take a security interest in these payments when they make crop loans. Instead, they advocate for putting more land into production - something that, by the way, will generate more crop loans and more business for the banks. Yet, putting this land back into production will have serious environmental consequences as well as a devastating impact on wildlife.

Taxpayers, citizens concerned about an equitable and sustainable farm program, environmentalists, and conservationists should be up in arms.

Sadly, few seem to be paying much attention.

For a more complete update, visit FarmPolicy.com.

Full post as published by Agricultural Law on March 17, 2008 (boomark / email).