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This response to Farm Bill criticism in the nation's editorial pages
was written by John Hansen, Nebraska Farmers Union president.
*****
From my vantage point, as someone who has been up to his elbows in
the fight for a fair, family farm agriculture friendly federal Farm
Bill since 1972, I think the discussion of payment limits needs to be
put into perspective. Rather than deal with the vast differences
between per unit values, costs, and market values of various ag
commodities, the political realities of what was or was not done on the
payment limit issue in the House without sinking the whole Farm Bill, I
would like to bring forward ten points to consider as the battle moves
to the Senate.
First, production agriculture, on a good day is a high risk, low
margin business that faces uncontrollable variables from nature, such
as heat, frost, flooding, hail, drought and insects to name a few.
While the House Farm Bill authorized a permanent emergency disaster
assistance program, it did not fund it. That needs to get fixed in the
Senate.
Second, production agriculture buys its inputs from an increasingly
concentrated and noncompetitive seed, chemical, machinery, fertilizer,
insurance, and capitol sector, Then, it sells its ag products into an
even more noncompetitive system of shared monopolies. The House Farm
Bill, with the exception of passing mandatory COOL, did not address a
multitude of competition and market reform issues. The Senate must do
much better.
(There's more.)
Third, unlike most businesses, for the most part,
production agriculture either cannot or does not set the price of its
products and pass along its cost of doing business. That must be
remembered when we talk about the rationale for an income safety net
for agriculture.
Fourth, the current Farm Bill legal structure and
public policy direction is a hand in glove product of our nation's
trade policy, which is primarily set by the noncompetitive ag
processors and U.S. based international grain and meat cartel who want
to be able to access, control, and use enough of the world's
agricultural production so that it can drag the price of raw material
products in the major production pools down to the lowest cost of
production in the world. That lowest cost of production level is
far below the cost of production for the developed nations, including
the U.S., Canada, and Europe. This kind of world wide sourcing is
being used to dismantle the world's traditional system of family farm
agriculture in developed, undeveloped, and undeveloping nations, which
I put the U.S. in. Current U.S. trade policy is being used
to move world food production towards the international cartel food
production model, which is tow down owned and controlled,
industrialized, vertically and horizontally integrated agriculture that
is the international corporate version of the failed former Soviet
Union food production system. We must stay focused on the need to
overhaul, not fine tune current U.S. trade policy.
Fifth, since the passage of the 1996 Farm Bill,
which was the most massive change in the structure and management of
domestic Farm Programs since they were first created in 1933, the grain
traders were able to eliminate the traditional price supporting public
policy tools that forced raw material prices up. As a result,
with expected results, the market place value of the six primary
commodities, corn wheat, soybeans, cotton, rice, and grain sorghum
$10.12 billion per year from 1997 thru 2006, a 16.2% non-inflation
adjusted drop. That means ag processors DID NOT pay farmers
$101.17 billion during that 10 year period compared with the watershed
year of 1996. In fact, only once in that 10 year period has the
value of ag commodities exceeded the cumulative market place value of
those six commodities. In 2006, farmers received 10.8% more for
the six crops than in 1996, which is less than 1996 if inflation is
factored in. This legalized looting of rural America must stop.
There must be a renewed focus on the need to pay family farmers a fair
price for the products we grow.
Sixth, let's remember that in 1996, the promise to
production agriculture from Congress and 1996 Farm Bill proponents
was: "Don't worry about getting rid of price supporting farm
programs because when ag prices go down, Congress will stand with you
to provide decoupled, welfare like, income transfers to make up for the
LOST market place value." Production agriculture is reaping the
public policy black eye that comes with decoupled, welfare like, income
transfer approaches. The grain traders are laughing at us all the
way to the bank with our money. They get the gold, we get the
public perception shaft. The real subsidy beneficiaries of the
current system is the cartel.
Seventh, the commodity title of the Farm Bill
represented .4% of federal spending. That is right, less than one
half of one percent of federal spending was in the last Farm
Bill. That level of spending represented nearly half of all net
farm income on average over the last five years. That is to say,
without it, production agriculture, on average, would go broke.
The current CBO baseline for ag commodities in Title 1 of the Farm Bill
is a 43% decline from the past Farm Bill.
Eighth, a major payment reform opportunity was lost
when Farmers Union was unable to get enough support from the rest of
the ag and commodity organizations to dramatically reduce the fixed
direct payments and replace them with a funded permanent disaster
assistance program, the one passed by the House authorized the program,
but did not fund it, and replace the direct payments with counter
cyclical payments that only kick in when prices fall and additional
income is needed to keep ag producers in business. The fixed direct
payments cause the greatest inequity.
Ninth, if we want to eliminate
federal subsidies for farmers, then, why is there no discussion
whatsoever about the best way to get rid of the NEED for the subsidies
in the first place? The Bush Administration's trade and
Farm Bill policy is to reduce and then eliminate all ag commodity
income supports. They want to get rid of the subsidies without getting
rid of the need for them. Where is the outrage and sense of
betrayal? Where is the political accountability for the Bush
Administration? Remember, they wield a mighty stick in this
process.
Tenth, we must ramp up producer
involvement in the Senate if we are to strengthen the weak spots in the
House Farm Bill. Payment limits is one of many issues in one of
eleven Titles of the Farm Bill. Our Farm Bill competition, the
grain and meat cartel, think and act structurally. If family farmer
agriculture is to effectively counter them, so must we. They love the
fact we are fighting over payment limits, and not focusing on the need
for real ag market reform, including an effective ban on packer
feeding, contract producer Bill of Rights reforms, an overhaul of
USDA's Packer and Stockyards Administration, and new more effective
ways to identify and administer anti-trust laws. We need lots of
reforms, none of which will come if ag producers sit on the sidelines.
All the best,
John K. Hansen, President Nebraska Farmers Union
1305 Plum Street, Lincoln, NE 68502
402-476-8815 Office 402-476-8859 Fax 402 476-8608 Home 402-580-8815 Cell
Email
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Web http://www.nebraskafarmersunion.org/
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