Monday, August 25, 2008

Does the Farm Bill Make the Grade?

I realize that the 2008 Farm Bill is kind of old news at this point, but since I didn't spend much time writing about it I thought I would include some tidbits from a recent article in "The Practical Farmers of Iowa" newsletter. They interviewed a few PFI members and asked them to grade the Farm Bill and give some of their thoughts about the positives and negatives. The grades and comments that followed were very interesting. I would love to hear some of your thoughts on the Farm Bill or on the grades and comments given by these Iowa farmers.

The four different farmers gave the bill a "D", "B-", "C-", and another "B-". That averages out to a solid "C" grade ... which does mean that overall it received a decent passing grade. But, it is also obvious that they weren't overly excited about the contents of the bill either. Let's start with the positive comments.

All four of the respondents were pleased with the changes to the Conservation Stewardship Program, which I admit is a program that I know very little about (check out the link to read more). Also, it seems like they were happy with some of the changes in the beginning farmer supports. I for one am going to look into some of those changes and see if there are any new benefits for us. Finally, a couple of the mentioned the positives of the growing "organic" segment of the bill.

The dislike portion of their responses were very interesting. They were interesting because not everyone had a huge list of dislikes, and in some cases had more positive to say than negative. But, it was also very interesting (and telling) that all four of them listed the same thing as one of their dislikes. Care to guess what that was...?
"(Dislike) The continued high subsidies for unsustainable ag production. (How will it impact your farm) The high subsidies for corn and soybeans will mean a continuation of commodity farming for most of my operation - I have to go were the profits are."

"It is frustrating that Congress again failed to pass commodity payment limitation reform in this Farm Bill."

"As far as commodity programs, they failed to put limits on payments."

"The lack of reform in the commodity subsidy program was discouraging."
I think it says a lot that these farmers (which come from slightly different backgrounds/viewpoints) all pointed to the lack of change in commodity subsidies as one of the major downfalls in this bill. I also think the first quote above says a lot about our agricultural industry. I'm not quite sure where I would grade the 2008 Farm Bill, but I suppose I would call it average ... for now.

5 comments:

Rich said...

"...The high subsidies for corn and soybeans will mean a continuation of commodity farming for most of my operation - I have to go were the profits are..."

Maybe I'm mistaken, but I don't understand how subsidies are so important to the profitability of a farming operation.

From a FSA Fact Sheet explaining the Direct and Counter-Cyclical Payment Program,

http://www.fsa.usda.gov/Internet/FSA_File/
dcpsignup08.pdf

it summarizes the Direct Payment for growing corn as:

Base acres planted to corn:
100 acres
x 85%
85 acres payment acres
x 110 bushels direct payment yield
x $0.28 per bushel direct payment rate
$2,618.00 direct payment


which results in the princely sum of about $26 per acre. The Counter-Cyclical Payment at the most (when prices plummet) would be about the same amount.

So the "high subsidy" would be between $26 and $50 per acre for growing corn, how can that relatively small amount of money be so vital to the profitability of a farm?

BUDDE FAMILY said...

In response to Rich, often times a difference of $26 to $50 can make or break a year. If you look at a normal family farm, at around 1000 acres, that is $26,000 to $50,000 per year. That's a yearly salary for many people. In many years farm subsidies have been the only profit our family farm has taken home. And in rough years, the subsidies help us break even.

In response to the farm bill discussion, I too am happy to see additional funding for the Conservation Stewardship Program (CSP), formerly the Cons Security Program. I was employed by USDA-NRCS and met with many farmers who were upset at the dilemma NRCS promoted. Farmers who were not good stewards toward the environment received all kinds of cost share money through EQIP, CRP, WHIP, etc to fix all the mistakes they had made. While those who were farming in an environmentally responsible manner received nothing. CSP pays producers based on those practices they are already doing (waste mgmnt, crop rotation, no-till, obeying herbicide setbacks). CSP was implemented in just a few watersheds across the US with very limited funding under the old farm bill, and those who were selected for funding were happy, although few and far between. Hopefully with this additional funding, we who have been good stewards may get paid back for some of that hard work and planning.

Scott or Pam said...

Our whole system of government is based on Mercantilism, which was brought about in the early 1860's. People that followed Jefferson's way of thinking fought it, and won, until then. The whole thing is based on subsidizing big business. Have you ever noticed that the only ones recieving subsidies are the Monsanto's and Cargill's and Conagra's of agriculture? I believe that we need to get off the government dole.

Yeoman said...

The ultimate problem on any Farm Bill is two-fold.

1. The bills inevitably become an income redistribution bill, which is unfair to everyone involved. Usually all sorts of non farm, or only vaguely farming related stuff, gets tacked into the bill.

As long as they're income redistribution bills they only really serve to separate cash from people's wallets and to preserve something that isn't working well.

2. A real farm bill would have to be directed at a systemic problem, and likely wouldn't involve much cash.

That may sound extreme, but keep in mind that our current system was created, in large part, due to government programs of one kind or another.

In order to effect a systemic change, we have to determine what we want as a society. We don't really seem to know that. What the government seems to think is that we want as much stuff as possible, as cheaply as possible, as we're "Consumers".

That's pretty insulting.

What I think we likely really want is a just society, where as many people as possible control their own economic destinies. In terms of farming, what that means is that a bill should disallow control of farmland by corporations that aren't made up of the working farmers.

Beyond that, the same approach should be used for sections of the economy that do not absolutely depend on bigness of scale. That is, there's no reason we should favor Wal Marts over Mom & Pop grocery stores, hardware stores, and the like. But we do through laws creating corporations without limits. Eliminating these creatures, which are mere fictional creatures of the government, would make things more expensive, but it would also mean that there'd be a lot more (thousand and thousands more) small stores, run by families, who would then be much more independent than the drones now working for Wal Mart.

A radical view, I know.

But you wouldn't have to use any tax dollars to do it.

Heidi said...

First time commenter here - I really admire what you're doing.

I'm an Iowa farm girl and my dad still farms (farrow-to-finish hogs and about 500 acres of corn & soybeans - I did it all: walked beans, cut pigs, plant, combine, etc.). Nothing gets me riled up like talking about the Farm Bill. You can read my thoughts on it at http://bankergirl.com/archives/123

Keep up the good work!

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