Every five years the farm bill comes up for renewal. The United States Department of Agriculture has now made public its recommendations for the 2007 Farm Bill and begun presenting those recommendations to Congress. The actual bill will then be crafted and adjusted in accordance with budget hearings later this spring.
The farm bill is huge—over $4 billion for the next five years—and the bulk of the money is devoted to agricultural subsidies for producers of only a few major cash crops (more than 90 percent goes to producers of corn, cotton, wheat, rice and soybeans). The subsidies began as a means of helping farmers during the Depression, but because they are linked to production, and agricultural production has drastically increased over the past 50 years, they have now become an incentive to overproduce the subsidized crops—thus raising supply and further driving down price—to the detriment of smaller farms that can’t compete.
The Environmental Working Group tracks all farm subsidies in hopes that showing who really gets the money (10 percent of farms receive 74 percent of subsidies) can change the debate. Moreover, their president, Ken Cook, argues that no other industry receives government support such as this:
When a call center gets outsourced to Pakistan, we give those people almost nothing to meet their trade needs. Corn and soybean producers on the other hand might be given $50,000 a year—year after year. For some cotton farmers it's a million dollars a year. Then farmers get enhanced asset value to sell or pass on to their heirs. It's much more generous for agriculture than for a factory worker who gets fired…Farmers aren't the only ones dealing with trade issues.
Other groups, such as Oxfam, oppose the American farm aid system based on the repercussions it has on the global south; As prices go down, developing nations are priced out of the American market.
It has become relatively accepted that the current system of subsidies aren’t working and the 2004 WTO ruling against American cotton subsidies has provided an additional impetus for reform, but there’s no easy way of fixing the system. Analysts say that simply eliminating agricultural subsidies all together would encourage further production and drive prices down even lower. An article from Food First cites an International Food Policy Research Institute (IFPRI) estimate that, “if the U.S. and the EU dropped all agricultural subsidies without adopting any price supports, corn prices would rise just three percent by 2020, and rice just 1.6 percent.” This is not enough to support smaller farms—here and abroad—from going under. Rather, many progressive groups support a program that increases market prices to a “reasonable and sustainable” level and via commodity purchases, food aid, and conservation credits.
But groups also argue that when subsidy cuts do occur, that money should be transferred into other, much needed programs. More than subsidies, the Farm Bill includes provisions for such disparate areas as food stamps, the school lunch program, farm disaster relief, conservation and land management, and rural development—areas that could benefit from more funds and more attention.
For example, the Farm and Food Policy Project has outlined an agenda that not only tackles the subsidies but also works for the environment, rural development and increased minority participation.
The good news is that the new USDA proposal looks encouraging (but not drastic). It seeks to reduce the amount of money paid in subsidies by lowering the trigger price at which subsidies kick in, and by lowering the maximum income at which a farmer can qualify for subsidies. And according to Oxfam, the proposal: “also adds a new, environmental component for direct payments, offering a ten-percent premium to farmers who implement a strategic conservation plan on their farms.”
The real test will be how the proposal fares in Congress, where the agriculture lobby holds more sway. Already some prominent beneficiaries of Big Agriculture have spoken out against some of the recommended cuts, and the budget battles have only begun.
--Alina Hoffman |
Tuesday, March 13, 2007 12:30 PM
