Capital Times (Madison, WI) / February 22, 2001 / By: Margaret Krome
Hailstorms may wreck the wheat crop or drought singe the pastures. But despite farming's famous unpredictability, there's still one sure bet in agriculture -- that every few years there'll be a booming crop of farm bill proposals. This year, as a 2002 Farm Bill looms, is no different. For years, when federal agriculture programs came due to be reauthorized, wise ones have stroked their beards and talked about "getting the government off farmers' backs" and "letting the free market work."
They've wanted to cut government payments to farmers that compensate for low prices and cut programs that take land from production to keep food stocks down and prices higher. They think consumers themselves will provide farmers signals to grow more or less by buying more food when prices are low and less when prices are high, according to classic economic models.
Alas, these wise ones are more optimistic than right. The free market has rarely been kind to farmers. Every farmer, especially with high-production technologies at his or her disposal, tries desperately to maximize yields, and prices fall. This happens even if, or especially if, prices are low. Since no farmer alone can change prices, all farmers try to bring in maximum yields at whatever price they're offered, driving prices even lower. But in farming, unlike many industries, even if the price of milk is at farm-bankrupting low prices, consumers don't leap to buy more.
In 1996, free market gurus got their way. Based largely on hopeful predictions of export markets and commodity prices, Congress passed the 1996 Farm Bill, whose radical change in farm policy left farmers' fates increasingly in the market's hands (although it carefully set rules that made sure the majority of direct government payments that were made went to large farmers).
Soon after the bill passed, farmers began experiencing serious and worsening financial stress. As export prices dropped, aggravated by Asia's financial crisis, many farmers found it cost more to grow a crop than it brought on the market. Further, farmers' share of the purchase price is even lower, with processors, wholesalers, retailers and others gaining the lion's share. In fact, farmers' share is dropping so relentlessly that, if left unchanged, it could drop to zero by the year 2030. Combined with repeated weather disasters, farmers' desperate situation prompted Congress to provide emergency farm bailouts, to the tune of $25 billion in the last three years.
In the mad scramble to wrest the last bit of yield from their fields, farmers haven't always protected the land. Not only has soil erosion increased, in many places well beyond its ability to be replenished, but scientists say that the nutrient load going from the Upper Midwest down the Mississippi River is principally responsible for the widening biological "dead zone" in the Gulf of Mexico.
In 1996, Congress pretended it was cutting farm support. But as farmers struggled to survive, the need for support became obvious, to the tune of $22 billion last year in direct payments, including emergency ones. Congress has been right to make those payments, but lamentably, almost none of it has gone to anything approaching long-term solutions. Society deserves more from its investment than stressed-out farmers and stressed-out land.
The 2002 Farm Bill should commit to supporting farmers and the land in the short run, but structure those investments to pay a longer-term return to society. Iowa Sen. Tom Harkin will soon reintroduce his Conservation Security Act, an innovative voluntary program that would pay farmers according to the amount of conservation they practice on their farms, rewarding the most conservation with the highest payments. This would support farmers financially and invest in America's precious agricultural resource base.
As every farmer knows, bad seed can spoil the crop. As policymakers pick among Farm Bill proposals, they should look for long-term investment rather than quick fixes, and recognize that society as well as farmers benefit when land is treated well and farmers are given help in putting more of agriculture's profit back in farmers' pockets and their rural communities.
Margaret Krome is a Madison writer.
Copyright 2001 Madison Newspapers, Inc.:
