What Will the Farm Bill Do for You?

Editorial 

Dave Lefever
Editor

What will the farm bill do for you? Well, that depends on who you are. Even if you are a Pennsylvania or Mid-Atlantic farmer from another state, it depends a lot on what kind of farming you do and what projects you will undertake in the next five years. In any case, the changes in the farm bill are probably not as drastic as all the commotion leading up to the final draft may have led you to believe.

One fascinating thing to me about the whole farm bill discussion is how many farmers in the heart of our readership area have basic, ethical objections to government subsidies, period. Of course, that’s what the five-year farm bill is all about — subsidies — though not all of that money is going to go to farmers, not by a long shot.

Let me be clear that I’m no expert on the roughly $300 billion piece of federal legislation — officially called the Food, Conservation and Energy Act of 2008 — that finally passed Congress last week (and appeared to have the votes to override the president’s veto, despite the glitch revealed late Wednesday of a congressional clerk sending him an incomplete document.)

But you don’t have to be an expert to see how much the farm bill involved tough political battles, many of them pitting the traditional and powerful ag interests of the Midwest and South (representing mostly grain and cotton) against reformers, including but not restricted to many other groups — representing the environment, specialty crops, sustainable farming and anti-hunger to name just a few. Not to mention the overarching battle between the Bush administration and Congress.

Interestingly enough, a lot of the highly varied interests are claiming at least a piece of victory in the final farm bill. But others are saying the bill fell short of real reform.

Traditionally the Mid-Atlantic region and the Northeast have not been hugely represented in the farm bill, not even close to the way the Midwest and South have been. But this farm bill has brought about a little loosening of that deadlock.

Pennsylvania Ag Secretary Dennis Wolff this week hailed the legislation as “the most supportive modern farm bill for the Northeast region” and he urged President Bush to sign it.

“It is a reformed farm bill,” Wolff told me this week.

Among the bill’s new programs to potentially help farmers in our readership area is a $440 million program to address conservation needs in the Chesapeake Bay region. Wolff also points out that a variety of energy research and investment programs, adding up to $1 billion for shifting away from corn to cellulosic-based ethanol production, will benefit Pennsylvania agriculture.

For dairy farmers, the MILC (milk income loss contract) was upgraded to include a feed adjuster that will help provide support in times of high feed costs.

The farm bill also expands nutrition programs such as Women, Infants and Children and the Farmers’ Market Nutrition Program. These safety net programs for families in need could potentially also benefit farmers by increasing consumption of some of their products. (altogether, food stamps and other domestic nutrition programs make up 66 percent, about $200 billion, of the total farm bill.)

If you’re a taxpayer, you might be riled that some wealthy landowners will continue to benefit and even thoroughbred horse owners will collect tax benefits through the new bill. Perhaps you wonder why crop farmers will continue to be eligible for subsidies when grain prices have been setting records. (Secretary Wolff pointed out, however, that they won’t be receiving subsidies during times with these kinds of prices.)

Beside helping to prop up prices for crop producers, these subsidies are seen as unfair by some of our friends in the global community who believe that the payments distort trade and negatively impact their local agriculture. These are valid concerns. And it’s not clear how the World Trade Organization is going to treat this farm bill.

Dan Morgan, a special correspondent of The Washington Post, posted an insightful analysis recently at FarmPolicy.com. He pointed out a lack of reform in the farm bill, despite all the talk of reform.

“It took House Agriculture Committee Chairman Collin Peterson (D-Minn.) ... to give away the game. Except for some ‘minor changes,’ the new farm program is ‘very much like the current law that we have been operating under,’ he told the House ...

“That’s disappointing to those who thought the time was ripe for a new kind of farm safety net more aligned with the realities of 21st century American agriculture,” Morgan wrote.

“The new program, like the old one, will continue to automatically channel $5 billion a year to a few hundred thousand farm households even if prices stay at record levels. Such a policy won’t win broad public support and probably isn’t sustainable politically in the long run.

“Even so, buried deep in this monster bill are what could be the seeds of change,” Morgan wrote.

He was referring to a new program called Average Crop Revenue Election (ACRE — not to be confused with Pennsylvania’s Act 38). Starting in 2009, farmers will have an option of relinquishing some of the automatic payments and other supports in return for guarantees from the government. If their income from growing certain crops falls below what could normally be expected (state yields time the average national price for the crop), the government will make up the difference.

Morgan said that ACRE “is a real safety net that provides risk protection (along with crop insurance) for people who are actually farming. The current system of automatic payments is not a safety net. The checks arrive twice a year, regardless of whether weather is good or prices are high.”

The average crop revenue election could be the “wave of the future,” according to Morgan.

Meanwhile, farmers in our region will continue doing the best they can producing high quality products, selling them to a hungry population and hoping for a fair market price. Some will make use of farm bill funds — for example, dairy and livestock farmers who need to improve conservation practices on their farms.

Of all farm bill titles, conservation is one that probably makes most sense for many farmers in the Mid-Atlantic. Conservation funds are not market or trade distorting, and farmers (even those opposed to government payments) should remember that these programs help them meet regulations brought by the government in the first place.