Despite what many are calling a 'victory' for family farmers, the new six-year farm bill that’s headed for the president’s desk may well sound the death knell for small and mid-sized family farms and independent livestock producers. And it even may very well be the last farm bill to grind its way through Washington.
Proponents hail the measure as a farm safety net to cushion family farmers and rural America from financial hardship. But unless you’re a meatpacker or a cotton and rice farmer in the South, the 2002 farm bill isn’t all what it’s cracked up to be. Despite some positive measures included in the legislation, including beefed up rural development dollars, conservation incentives, trade promotion programs and green energy initiatives, the bill’s shortcomings unfortunately outweigh its virtues.
As the only working family farmer in the U.S. Senate, I make it my business to give my fellow farmers in the Midwestern breadbasket a voice at the policy tables in Washington. From a series of meetings I held across the state in January, farmers in Iowa made clear to me they wanted Washington to crack down on sky-high payments going to large-scale farmers. It’s ridiculous for Washington to shovel the lion’s share of the farm benefits to a handful of large corporate farming operations. Moreover, Iowa producers urged me to push public policy that would keep competition alive in the livestock industry by banning packer ownership of animals fed for slaughter.
The good news is my persistence to preserve competition for the independent producer held sway in the Senate during floor debate in February. The Senate-passed farm bill included my amendment to ban packer ownership of livestock 14 days before slaughter. In addition, I also won passage of my bipartisan amendment to eliminate the ability of packers to force producers into mandatory arbitration. And I managed to nail down effective farm payment limitations by getting rid of the three-entity rule and capping annual farm payments at $275,000.
The bad news is that during conference negotiations between the House and Senate, these important pro-family farmer amendments were dropped. I’m sorry to say the bicameral compromise is especially detrimental to beginning farmers and the next generation of potential farmers. Thanks to the conference agreement, the top 10 percent of those collecting farm payments will get two-thirds of the money. This only will help growers to grow bigger, gobble up more farmland and inflate land rental rates all of which makes it harder for beginning farmers to get started.
Plus, uncapping federal farm payment limits will further derail public support for the so-called farm safety net. It’s going to be tough to hail future farm bills as a necessary tool to protect America’s productive family farm system. The Environmental Working Group created a well-publicized database available on the Internet that exposes the gross payment disparity between the largest producers and everyone else. The new farm bill will only make the gap widen over the next six years. This will only make it that much harder to win urban support for farm programs in the future.
Iowa farmers may wonder what is in it for them. The Farm Security and Rural Investment Act of 2002 authorizes $180 billion in spending over the next decade, a $73.5 billion jump. The farm bill conference report guarantees $1.98/bushel for corn and $5.00/bushel for soybeans in 2002-2003. It resurrects a counter-cyclical program to supplement farm income when prices fall below the set target price of $2.60/bushel for corn and $5.80/bushel for soybeans. Farmers will be able to update their base acres using 1998-2001 planting records. But they will have to wait until December or even next March before they receive any sizable payment. And no one knows better than farmers that paying down debt sooner rather than later makes your money go a lot further.
Another glaring mistake by the congressional negotiators involves matters of international trade. America’s farmers export from one-fourth to one-third of their products abroad. Farmers and ranchers depend on a healthy, competitive free and fair trade environment for profitability. But again, a provision stripped from the Senate bill in conference puts American agriculture at risk of running into non-compliance with world trade agreements.
Staying compliant will help the U.S. reach its principal agriculture negotiating objectives: eliminate trade-disrupting export subsidies, reduce trade-distorting domestic support, and gain market access. If the U.S. reneges on our international trade obligations, it will put a dent in our credibility and leadership leverage at world trading tables. Exceeding international farm subsidy limits to 'help' America’s farmers and ranchers will do far more harm than good.
The farm bill as re-written by the House and Senate conference committee falls short. It fails independent producers. It fails small to mid-sized family farms. It fails to meet our international trade obligations. It’s a shame Washington has frittered away this opportunity to keep competition alive and kicking in American agriculture. Let’s hope family farmers and independent producers are able to survive despite the so-called farm safety net about to be cast upon them.