President Clinton quietly and reluctantly signed historic farm legislation Thursday that snaps the decades-old link between crop prices and government subsidies.
Although the law rightfully lifts many government controls on farmers, it “fails to provide an adequate safety net for family farmers,” the president said from a White House mourning the death of Commerce Secretary Ron Brown.
Clinton opposed the key farm provisions but said growers need to know what the government has in mind for them as they head to the fields this spring. Agriculture Secretary Dan Glickman pledged the department would do everything in its power to carry out the law.
The law ends government-guaranteed prices for corn, other feed grains, cotton, rice and wheat - a staple of U.S. farm policy since the Depression. Instead, farmers will get guaranteed payments that decline over seven years and an immediate end to most planting controls. The payments total $36 billion over seven years and account for most of the spending in the $47 billion law.
“This farm bill is the most historic change in American agriculture since the 1930s,” said Sen. Richard Lugar, R-Ind., chairman of the Senate Agriculture Committee. “Production and supply controls will end, and farmers will produce for the market for the first time since the Great Depression.”
The timing for wheat farmers couldn’t be much better. Wheat prices currently are well above the level that triggers subsidy payments. If prices hold up, farmers could receive both a good price for their crop and payments from the government for this year’s crop.
That windfall is one reason the administration had opposed the bill. However, farmers now have the responsibility to invest wisely after good years so they have a cushion when guaranteed payments dwindle, leaving growers with little protection if prices collapse.
Clinton said he would propose legislation next year to restore the safety net. Congress will definitely get a shot at crafting new farm legislation when the law expires in seven years.
Supporters of the new law say the guaranteed payments would put financial planning and risk management into the hands of farmers while guaranteeing farm programs against almost certain cuts in the future.
“With one signature on the market transition contract, farmers will be free from seven years of paperwork and long lines at the county USDA office,” said Rep. Pat Roberts, R-Kan., chairman of the House Agriculture Committee and chief author of the plan.
Glickman said the department will work on creating tools for farmers to find alternatives, such as revenue insurance, to traditional subsidies. He also said he would urge farmers and bankers to work on ways for farmers to save their payments for a rainy day.
While the administration opposed the core provision, the bill held enough sweeteners to avoid a veto, including money for conservation and environmental protection and for rural development and research, and a guarantee that food stamps and other nutrition programs will continue while Congress works to overhaul the welfare system.
The administration also supported crop provisions giving growers more flexibility to plant what they want.
“The expansion of planting flexibility will improve U.S. competitiveness in world markets,” Clinton said.
The signing means Agriculture Department employees will rush to carry out a law that guarantees many will lose their jobs with the simplification of farm programs. But Glickman said the law creates enough work to prevent job losses in the first year or two.
Because of an earlier reorganization, the department already expected to lose 2,500 county-level employees between 1993 and 1999. The farm law could cut that number by 1,400 more, the department said last month.