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by

Dan Morgan

 

(Read the complete summary by downloading the report.)

More than a year after Congress enacted a new multi-year farm bill (the Food, Conservation and Energy Act of 2008), the politics of agriculture in Washington have been substantially reshuffled.

Proposed climate change legislation has confronted the farm bloc with issues that received scant attention in the farm bill itself. At the same time, the congressional energy committees and the Environmental Protection Agency (EPA)—not the traditional guardians of agriculture—have taken thelead in shaping climate and biofuels policies thatcould have long-term impacts on farmers. At the White House, a new president has proposed cutting some key subsidies, and he has signaled interest in aligning himself—at least symbolically—with a grass roots movement that supports “sustainable agriculture” and “healthy foods.”

These developments have moved long-standing tensions over agriculture policy to center stage. Lobbies representing some of the major farm organizations and commodity groups—you might call these “Old Ag”—generally support the status quo. They see agriculture as a loser in climate change legislation, and they also favor continuing traditional subsidies and direct payments to farmers. But “New Ag” forces, which now include Agriculture Secretary Tom Vilsack, some grass roots food and farmer organizations, and environmental groups, envision a revamped agricultural policy that will reward farmers and ranchers for the contributions they make toward reducing or offsetting carbon emissions; safeguarding water, soil, and air quality; ensuring humane treatment of farm animals; protecting food safety; and guaranteeing ample supplies of healthy, locally grown produce. While OldAg emphasizes the U.S. food system’s enormous success in producing ample food at cheap prices, New Ag advocates point to the hidden costs—in environmental degradation, poor diets, rising concerns about food safety, carbon emissions, and mistreatment of farm animals.

This paper examines these tensions in the context of the 2008 farm bill, with a view to setting the stage for the next phase of debate over climate, energy, farm subsidies, food safety, trade, and U.S. agricultural aid to farmers in developing countries. In Congress, resistance to change remains strong. Most of those who played a key role in the farm bill debate remain in place, and some of the same interests are aligned in this year’s crop of issues. Moreover, those in the rural wing of the Democratic Party—one might call them the “Agricrats,” those moderate-to-conservative Democrats who put the needs of agriculture first—appear even stronger and more confident than they did a year ago.

The 2008 farm bill was an important political achievement for the new Democratic majority in Congress. In the House, Democratic leaders reasoned that a farmer-friendly bill could help restore the rural–urban coalition that enabled Democrats to rule for most of the last two-thirds of the 20th century. The new speaker, Nancy Pelosi, whose close relationship with House Agriculture Committee Chairman Collin Peterson was forgedin her 2001 battle to become Democratic whip, backed that strategy. To that end, she was willing to postpone a reform of farm subsidies that she and other senior Democrats privately supported.

In the Senate, the bill was largely shaped

ex parte by four moderate-to-conservative senators from major farm states. Working informally outside the control of Agriculture Committee Chairman Tom Harkin (D-Iowa), they agreed to protect key interests of Southern agriculture (a Senate GOP bastion) while providing new benefits for ethanol-dependent and drought-prone farms and ranches in the central farm belt and northern Great Plains (a Senate Democratic stronghold).

The result was a mixed success for loosely knit alliance of reformers—foundations, church groups, environmental and antihunger advocacy organizations, fiscal watchdogs, and others—who joined forces in an unprecedented effort to bring about fundamental changes in the farm bill’s priorities.

The broad goals of the reform alliance were threefold: to pare back government payments seen as duplicative, wasteful, and tilted toward the wealthiest farmers; to phase out subsidies seen as propping up rich farmers at the expense of unsubsidized farmers in developing countries; and to use the savings either to reduce the federal deficit or to boost financing for nutrition, rural development, conservation, and renewable energy.

The farm bill increased funding for conservation programs, raised minimum benefits in the food stamp program (renamed the Supplemental Nutrition Assistance Program, or SNAP), added money for fruit and vegetable snacks in schools (a signature initiative of Senate Agriculture Committee Chairman Tom Harkin), boosted research grants for the fruit and vegetable industries, and directed new funds to beginning farmers, organic farmers, and local farmers’markets. In a nod to minorities, the bill set aside $75 million to educate and support poor and socially disadvantaged farmers.

Advocacy groups, ranging from antihunger organizations and organic farmers to hunting and fishing clubs and conservationists, achieved some key goals and supported the final legislation. It seems likely that pressure from interests well connected to the Democratic majority—such as antihunger and conservation groups—would have resulted in some, if not many, of the changes. But agriculture journalists and others interviewed for this paper generally agree that the reform effort focused unprecedented attention on the farm bill and raised public awareness of its importance. The alliance’s early efforts “made increased funding for food stamps more likely,” according to one veteran reporter who followed the bill closely. A reform lobbyist put it another way: “We wanted money to go to other priorities and none of that would have materialized if we hadn’t put on a serious game. They knew they were in a fight.”

The legislation took some modest steps to restrict subsidy payments to the richest farmers. Nonetheless, Congress took the path of least resistance: The farm bill protected traditional farm subsidies, even as farming profits, assets, and prices hit near-record levels, and signs emerged that U.S. agriculture, riding a boom in biofuels, may have entered a new era calling for a reassessment of farm policy.

The law left in place, and in some cases built on, the government subsidy system embedded in the 2002 farm bill—legislation widely viewed as a retreat from reforms begun in the mid-1990s. It did not reduce the deficit. Congress approved several new programs that added more than $10 billion to the estimated ten-year cost of the bill, and then used various budgetary devices to “pay” part of that.

A major new program (Supplemental Revenue Assistance Payments, or SURE) will enable farmers and ranchers to bypass the annual appropriations process when seeking compensation for weatherrelated losses. Average Crop Revenue Election (ACRE) is a new program that protects farmers against a combination of low yields and low prices, and locks in some payments if prices stay high. It adds a new layer of government bureaucracy to a system that is already complicated beyond comprehension even to specialists.

 The bill generally received low marks abroad, and some predict that it will lead to formal complaints from U.S. trade competitors. “The new U.S. farm bill represents an opportunity lost to bring meaningful and beneficial reform to U.S. agricultural policies,” said Phillip Glyde, executive director of the Australian Bureau of Agricultural and Resource Economics.

What happened? In the best of circumstances, making the case for sweeping reform of domestic farm programs is challenging. Food in the United States is abundant and relatively cheap, a fact that is endlessly trumpeted by farm lobbyists. In truth, Congress faces more pressing problems: foreign wars, Medicare and Medicaid costs spiraling out of control, and a financial crisis. Direct payments to farmers ($12.2 billion in 2008) are a rounding error in the $3 trillion U.S. budget, amounting to 0.4 percent. Farm programs are arcane and difficult to understand, and Chairman Peterson is probably correct when he says few lawmakers “have a clue” about them.

Reformers faced enormous obstacles in 2007 and 2008. The breakdown of the Doha Round of international trade talks removed pressure on the Agriculture committees to bring subsidies into line with a trade agreement. The reformers’ argument that U.S. subsidies were a drag on world prices and penalized poor farmers abroad was undercut by a dramatic increase in prices, dwindling stocks of wheat, and food shortages in some countries. Except for cotton, “tradedistorting”subsidies for crops such as grains and soybeans all but disappeared.

In retrospect, the advocacy campaign seriously overestimated the impact that church groups and nongovernmental organizations could have on programs as entrenched and well defended asthe farm programs. This problem was summed up bluntly by Senate Majority Leader Harry Reid ( D-Nevada) at a meeting with leaders of reform organizations in late 2007. Presented with a stack of editorials calling for reform, he said: “That’s all very nice, but it doesn’t help because agriculture talks big money in the Senate.”