May 2, 1996 in City
Wheat’s Future In Farmers’ Hands
Wheat farmers face an agonizing transition, and wishful longing for the past won’t make the future go away. After 60 years of dependence on federal subsidies, our region’s leading industry has just seven years to get off the dole.
This will - or should - force an urgent campaign to change the way this crucial industry does business. But it’s not clear where the industry, consisting as it does of numerous independent business people, will find the leadership and coordinated reform it needs.
Only one thing is clear: Congress has enacted a federal farm program that phases out the industry’s safety net. During the next few months, farmers must decide whether to enroll in the program. Those who do will receive seven years of cash grants, dwindling in size, and after that, they’ll be on their own. Those who don’t enroll can leap now into the icy waters of unaided global competition.
The grants, unlike subsidies of the past, are designed to help farmers make the transition to financial independence. Even if grain prices stay high, as they are now, the grants will continue. That’s fair. Past federal aid, dwindling for years, left little profit for farmers to invest in competitive innovations.
Now, with prices high and grants guaranteed, farmers have a one-time investment opportunity.
Desmond O’Rourke, an agriculture expert at Washington State University, worries that as many as half of the area’s farmers may be “in denial,” hoping Congress will bring back the old subsidies someday. But Congress will become only more urban in its priorities. It shouldered these costly cash grants for one reason only: transition.
So, how should the cash be invested? Newer, more efficient equipment and repayment of debts will be high on every farmer’s list.
Equally important, but difficult to organize, is change in the distribution and marketing system that gets grain to buyers overseas. Fewer buyers want the bulk commodity for which the current system is designed. They want a premium grain with specific qualities, such as protein content, tailored to their needs. It will take money to install the testing and storage equipment needed at grain elevators all over the region to separate grain into different categories for different buyers.
University research should be a priority, too. It can identify market opportunities and efficient growing methods. Yet, Congress is cutting research funds just as it is cutting aid to grain elevators. So wheat growers themselves will have to step in with cash.
If growers invest to stay competitive, they’ll be fine whatever Congress does. Their future and the region’s economy hinge now on concerted, competitive reforms.
, DataTimes The following fields overflowed: CREDIT = John Webster/For the editorial board