The Debate Warms up for 2002 Farm Bill

Henry E. Rodegerdts

At the February 1999 Winter Conference of the National Association of State Departments of Agriculture (NASDA), representatives from the States of New Mexico, Florida, Arizona, California, and Texas discussed the feasibility of forming a state coalition to more effectively promote the production and economic concerns of their specialty agricultural producers in the ongoing national agricultural policy debate. The early result of this discussion was the first meeting of NFACT on April 10, 1999, in Austin, Texas. By July, a Memorandum of Understanding had been signed by each of the NFACT states to memorialize their commitment to the goals and purposes of the new coalition. Collectively these states share more than 23% of the total cash agricultural receipts in the United States and represent 25% of the entire U.S. Congressional Delegation. Because of the diverse crop mix grown in these states which is not produced in the traditional farm belt states, the views and concerns of the NFACT states often do not receive the attention in agricultural policy debates that their share of the agricultural production base suggests might be appropriate.

Initial position papers and lobbying efforts coming from NFACT focused on 1) increasing funding for viable alternatives to methyl bromide, 2) increasing the effectiveness of federal crop insurance programs and broadening those programs to include all crops, 3) ensuring that federal-sponsored conservation programs are held accountable for their expenditures to ensure they are spent in a manner most beneficial to farmers and ranchers, 4) increasing funding for better detection and eradication methods for plant and animal pests in these point-of-entry NFACT states, and 5) increasing funding for the development of export markets for the more than 300 specialty crops grown in these five states.

Now that the 2002 Farm Bill is beginning to be publicly debated, the NFACT states have geared up in order to have a greater impact on what comes out of that debate than has been the case in the past.

Beginning in the fall of 2000, each of the states have been sponsoring 2002 Farm Bill forums under the auspices of their respective state department of agriculture. In California, there will have been ten such gatherings throughout the state before being concluded in mid-February 2001. The format in each has emphasized addressing the focus issues of NFACT: animal and plant health issues, conservation, international and domestic markets, research, and risk management.

A sampling of the questions to be addressed during each of the California sessions reflects the fact the coalition wants the 2002 Farm Bill debate to expand considerably beyond its traditional emphasis:

1. What policies and programs are needed to address the issue of human health problems arising from imported pests and diseases?
2. How should the Farm Bill address issues such as: agricultural land preservation, rural/urban interface issues, and urban conservation?
3. What incentives could be placed in the 2002 Farm Bill to ensure that fresh produce and other California products are available to consumers in economically challenged areas nationwide?
4. What is the right blend between private initiative and public resources in research?
5. How should the Farm Bill address special transportation insurance for farm worker transportation?

The "backbone" of the report’s six point program . . . is an insurance safety net.
Similarly, the coalition’s parent, NASDA, released in September 2000 a draft proposal entitled Farm Bill 2002. It too moves into new territory by recommending a Supplemental Income Support (SIS) program which would provide countercyclical payments to producers of all crops, not simply the basic seven program commodities of the past, when market prices are low. One of the factors in the equation determining the amount a producer would receive would be the price European Union producers receive for the same commodity. The payments would be divided among U.S. crops consistent with the share of total U.S. agricultural market receipts for each commodity. Another innovative aspect of the proposal is that payments would be made exclusively to producers. There would be no sharing of the program payment with non-producing landowners, a characteristic of current programs, but which the NASDA report states "fails to address problems facing American agricultural producers."

The "backbone" of the report’s six point program, which also includes an acreage reduction program, conservation payments, a five-year short-term conservation reserve program, and a farmer owned crop storage reserve, is an insurance safety net. It too would cover all crops. The standard program option would ensure payment of 90% of a producer’s actual documented cost of production when conditions beyond the control of the producer ("weather, disease, domestic policy, foreign policy, etc.") cause the producer’s commodity yields to be "substandard" or market conditions result in prices dropping below breakeven levels. To avoid the one-size-fits-all risk insurance approach of current programs, a characteristic that has been roundly criticized, the proposed program would be based upon representative budgets that would be developed for each crop taking into consideration the producer’s locality and further allowing a generous 200% deviation from that representative budget in order to factor in an individual producer’s variable expenses such as labor costs, interest on operating capital, maintenance and repairs, etc. The stated goal of the program is to provide "a true safety net to all producers in a fair and equitable manner." It would be an indemnity program intended to enhance a producer’s ability to remain in agriculture. The report states, "[t]his program is a safety net and not a revenue enhancer."

To this mix of non-federal study and discussion initiatives, one must add The Report of the 21st Century Commission on Production Agriculture, which was released as this article was being written. The 1996 Farm Bill mandated a commission be appointed to study in advance of the 2002 Farm Bill what direction federal agricultural policy should take in the 21st Century. The 11-person commission, dominated by farmers, has been deliberating and conducting hearings throughout the nation for the past several years. It is suggested the commission is recommending keeping the market-transition payments of the 1996 Farm Bill and adding new supplemental income assistance programs but without any required reduction in acreage to qualify.

As American agriculture and its urban neighbors embark upon this debate for the 2002 Farm Bill, it would be useful if all participants reflected upon the meaning of the closing remarks of John M. McClung, President of the Texas Produce Association, made November 16, 2000, at the Texas NFACT Farm Bill Listening Session:

Let me close by saying that no matter what Congress does in the 2002 Farm Bill, there will be farmers and ranchers in the country. But without a comprehensive safety net, we may be dramatically fewer. Many economists, farmers and ranchers believe that is precisely how it should be – the smart will survive on the land and the weak will move to town. But of course this is not simply a debate over supply and demand; it is a debate about the social and cultural values of our nation.