A new farm bill is due in 2007, and the nation needs a good debate to decide what exactly we want to accomplish with federal agriculture programs.
Unfortunately, agriculture is not a political issue right now. We probably will get another bill like the one passed in 2002, which is one of the worst pieces of legislation in the past half-century. But it will be extended unless the voting public pays some attention.
By way of disclosure, I own a farm and have 18 acres in the federal Conservation Reserve Program.
Historically, significant legislation is written in response to real or perceived crises. In 1933, during the depths of the Great Depression, the federal government got into agriculture in a big way for the first time. A third of all Americans farmed, farm incomes were well below the national average and farm prices were low. There was tremendous suffering in rural areas, particularly in the South.
The Roosevelt administration’s Agricultural Adjustment Act established a system of federal price supports that has persisted to the present. But the U.S. economy and rural society are not the same as 73 years ago.
“The farm problem” captured headlines in the 1950s. Public discussion focused on the large surpluses of stored farm commodities generated by the legislation enacted two decades earlier.
In the 1970s, farming made headlines when the Soviet Union purchased large amounts of U.S. grain in 1973 and as U.S. farm exports burgeoned after the devaluation of the dollar. Agriculture boomed and farmland prices soared.
The bubble burst in the 1980s. Tens of thousands of farms faced bankruptcy. Hundreds of private banks and the federal Farm Credit System were broke. The 1985 farm bill strove to stanch losses while securing increased soil, water and wildlife habitat conservation.
The 1996 act, billed as “freedom to farm,” was supposed to get government out of agriculture. Subsidies were styled as “transition payments” that were to disappear over time. Reflecting the Contract With America ethos of the new Republican majority in the House of Representatives, agriculture was supposed to move to a free-market basis.
Seven years later, those lofty goals went out the window. There was no pressing problem in agriculture, yet bipartisan majorities in Congress shoveled unprecedented amounts of taxpayer money out the door with no specific objective or focus. Limits on how much money could go to any individual farmer were tossed away.
The outcome is outrageous. Ten percent of farms now capture 60 percent of all subsidies. Most outlays go to households with incomes well above the national average. Outlays run from $15 billion per year up. Farming becomes become more sharply divided with a small minority of large operators producing a high and increasing proportion of all output.
More than at any time in 50 years, we should ask ourselves what we want to accomplish with federal farm programs. But that seems unlikely to happen.
© 2006 Edward Lotterman
Chanarambie Consulting, Inc.