Imperfect It May Be, But Farm Program Is Vital

It should not be lost in the debate over the forthcoming federal farm bill that agriculture’s budget has already been reduced by 50 percent since the mid-1980s. Had all the other departments of federal government provided similar cuts, a balanced budget would not be an issue today.

Additionally, we must keep our emotions in check. Equating farm subsidies with welfare is particularly pernicious as it only fuels the flames of animosity between urban and rural constituents.

The overall debate in Washington has been centered around the principled question as to the exact role of the federal government. Many will argue that the federal government has no role in agriculture. I am inclined to agree.

However, if it has no legitimate role in agriculture, what right does it have to subjectively eliminate markets by imposing embargoes on other countries? American agriculture is only now recovering from the ill effects of embargoes enacted in the 1970s!

Opponents of farm subsidies argue that agriculture should be forced to live in the free-market economy. Again, I am inclined to agree.

However, how can agriculture move to a free-market economy when the federal government continues to monopolize the sale of grain? Furthermore, how does American agriculture compete with countries that provide even greater farm subsidies?

A common argument against farm subsidies suggests that farmers should simply become more efficient. This argument clearly lacks merit.

Most farmers operate solely or with the aid of one or two hired employees. The farmer does not have the option of increasing his sale price for every new regulation or compliance measure he must abide by. Necessary farm inputs, such as fuel for equipment and fertilizer, have often risen well above the inflation rate and yet the farmer cannot affect his net income by adjusting his market price.

Additionally, studies show that American Agriculture provides for the most efficient use of land anywhere in the world.

The farm program is multifaceted, combining provisions for cost-recovery price supports and conservation use. Each farmer receives deficiency payments at the same amount per bushel, based on the difference between the average market price and the predetermined target price of $4 a bushel. This payment is subject to an overall maximum of $50,000.

Farmers receiving more in farm subsidies do so because they farm more ground and their costs are greater. For farms exceeding the limitation, the per-bushel subsidy actually is reduced with each additional bushel produced.

Opponents contend this is analogous to welfare. However, these payments are tied directly to production and participants must follow prescribed conservation practices. Furthermore, price supports aid American farmers as they do battle with unfair trade and domestic policies established by competing countries.

The Conservation Reserve Program was established in the mid-1980s in response to pressures from the environmental lobby. As with any policy, there are costs involved. These costs represent compensation for lost revenue and land maintenance. Opponents of CRP argue that the federal government has no right paying individuals to ensure conservation practices. However, if the federal government were to mandate such practices without funding them, it would violate the right of private ownership of property.

Consequently, CRP was established as a voluntary partnership between the government and its people. Participants voluntarily take land out of production in exchange for annual rental payments from the government.

Absentee landlords appear to be a favorite target of critics who argue that those who don’t live and work on the farm are not entitled to subsidy payments.

Most landlord-tenant relationships are structured on a one-third, two-thirds crop-division basis. The landlord is bearing the risk of market fluctuations, as is the tenant. Since deficiency payments are determined by the market, the landlord should be entitled to his share in the same manner as the tenant. To deny participation would again circumvent the principle of private ownership; doing so would place unwarranted restriction on investment savings.

The need to move to a free-market system is imperative and not denied by many farmers. With emerging markets in Asia, the United States is currently repositioning itself to become the most dependable supplier of agricultural commodities.

By securing production in the United States, we also protect vital wetlands and rainforests that might be forced into production were it not for the efficiencies of American agriculture.

At this critical juncture, we must not abandon American agriculture as it strives for dominance in the global economy. We must have further assurances that grain will not continue to be employed as a federal policy juggernaut in combating perceived injustices throughout the world.

Until that time comes, however, I believe we must maintain some semblance of the current program.

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