Farm to Family Column: Do Farm Program Payments HelpRural Communities?

By Curt Arens

Northeast Nebraska News Agency

May 20, 2007

DearFriends,

As anew farm bill is being formulated, haggled over and run up the flagpole to seewho salutes, policy questions about the wisdom of our current food and farmpolicy linger.

Dodirect commodity payments to farmers help rural communities? Do unlimitedpayments help family farmers? Which programs do the most for family farmers?Which came first, the chicken or the egg?

USDAdoesn't comment on the chicken and egg, but they do tell us that farmsreceiving commodity payments account for 64 percent of crop production in thenation and 45 percent of livestock production. So these producers are morelikely to be full-time, active farmers and operate on relatively large farms aswell.

Again,according to USDA, conservation programs typically go more to part-time orretired landowners, although 60 percent of EQIP payments are set aside forlivestock producers dealing with environmental issues, and who may or may notraise crops.

Thefederal piggy bank for commodity payments is much larger, around $8 billion in2004, compared to a mere $2 billion for the conservation programs. However,with the new farm bill, these numbers might get closer together as thepopularity of conservation programs grows.

Manyfarmers receive payments from both types of programs, but the numbers aren't aslarge as you might think. Of the 40 percent of farms that received governmentpayments in 2004, 17 percent received payments from commodity and conservationprograms. That's only about 6 percent of the total number of farms in the U.S.

It isall interesting stuff to ponder, and our lawmakers in Washington, D.C. arepaying attention to these types of numbers. But those of us out here on theland just want to know if the programs actually work. Do they increase farmincome? Do they pump needed revenue into rural communities? Do they help usprosper? Do they keep people on the family farm?

Ourgut feeling would be that commodity and conservation program payments put moneyin the pockets of farm families that need it. These payments, although quitesmall for most area farmers, help pay the bills and help farmers purchaseinputs, improve their facilities and pay the family and farm expenses. So wemight guess that program payments do keep people on the farm and they circulatearound our communities and help rural businesses in that way too.

Butthe data collected by USDA suggests otherwise. The high program payments of themid-1990's did little or nothing to stem the migration out of rural counties.During periods when some rural areas were gaining population, the ruralcounties most dependent upon government farm program payments saw the greatestloss of population.

Theproblem might be that a dismal ag commodity economy that relies heavily ongovernment payments to stay in the black, does little to increase the diversityand resilience of rural counties or to foster the creative, capitalist spiritof farmers on the land.

So,it will probably take more than an investment in commodity and conservationprogram payments from a farm bill to enrich rural America. Most of the researchshows that a healthy economy combined with good farm returns and broad-basedprograms that help transfer farm land to another generation, help ruralbusinesses expand and help grow rural infrastructure are all just as importantto us as farm program payments. Now that we have everything figured out withthe farm bill, it's time to tackle the chicken and egg question.

Hopeyou have a good week.