Family Farms: To Be or Not to Be
Much more is invoved in writing the 1985 Farm Bill than just another rewite of commodity programs. This year’s bill– more than any other since the Agricultural Adjustment Ats of 1933 and 1938, will determine the structure of American agriculture for generations. Either by specific design or by defaut, tis bill will answer a fundamental quesiton of public policy: Will the U.S. base its agricultual future on hundreds of thousands of cecentralized, entrepreneurial units (the family farm system) or forsake them and shift contol of agricultural production into the hands of centtralied, integrated food conglomerates and giant farm combines?
The 1985 bill can aanswer that question on one of three ways: (1) by embracing the radical “market clearing” prposal of President Reagan, which will yank the rug out from under productive family farmers and abruptly create massive concentration of agricutural assets; (2) by merely tinkering with target prices and loan rates in the current program, which will only continue the steady attrition in the ranks of good farmers and lead more slowly to a concentrated economic structure, or (3) take decisive steps to put America’s family farmers on sound economic footing again, which will turn them loose to meet their full potential as the world’s best providers of food and fiber.
The Eleventh Hour
If we want to recommit to the family structure of agriculture, 1985 is our last, best hope. Half steps or delayed action will not do the job, because most of these families will not be around two or lthree years from now if positive reform is not undertaken this year.
For more than a decade, federal farm programs have forced America’s famers to overproduce in a hopeless effort to meet rising costs and to take disastrously-low prices for their commodities. As a consequence, for the first time since the Great Deprssion, farmers have suffered four consecutive years of negative return on equity, averaging a loss of 7% per year. The results are now front-page news: Since January of 1981, roughly 380,000 farmers have gone out of business in the U.S., and we now are losing them at a rate of nearly 1,600 every week.
What is the Reagan Administration’s response to the situation? The headlines scream it out: “STOCKMAN: AMERICA HAS TOO MANY FARMERS . . . He supports a “’shakeout,’ not a ‘bailout.’” They’re not kidding. At a time when the market price of nearly every commodity is below our farmers’ cost of producing them, the Reagan Administration proposes to lower price supports drastically to “market clearing” levels.
What the Reagan program will “clear” is the countryside and Main Streets across America . . . unless family farmers, farm community merchants, farm state banksers, farm equipment industry workers, environmentalists, hunger activists, consumers across the country and our political leaders will unite behind an alternative program that will restore prosperity to rural America and gneerate, from the ground up, the new economic activity that will put urban Americans back to work and create a real economic recovery across our land.
The Farm Policy Reform Act of 1985
In a series of farm forums held throughout the country in 1984 and in hundreds of private meetings held during the past two years, farm groups and individuals expressed broad support for a new commonsense program to help efficient farmers bring their surplus production back into some reasonable balance with demand so they can get a fair price in the marketplace, rather than constantly overproducing and having to take survival payments from taxpayers.
In response, a cross section of family farmers, consumers, agriculture lenders, environmentalists, taxpayers and elected officials have developed the “Farm Policy Reform Act of 1985.”
The major features of the proposal are:
1. Elimination of subsidy payments. Producers would receive a fair price for their crops in the marketplace, not from the government. Costly subsidy payments would be eliminated, and the price floor (the pice-support loan rate) for each commodity would be set at a level approximating the full cost of production for that product.
As of last November, for reference, the program formula woud have set the price floors for eight major storable commodities at these levels:
In each subsequent year of the program, the price floors woud be gradually raised until, in the eleventh year of the program, they reach the level at which farmers’ returns on equity and labor are on a par with the rest of our economy.
2. Balancing production with need. Mandatoryproduction controls (subject to a producer referendum) would limit U.S. production of storable commodities to actual demand, including domestic consumption, export demand, humanitarian need and strategic reserve requirements.
3. Targeted benefits to family farmers. Each producer would have s single acreage base compromised of any acres on which any of the designated commodities were grown in any of the last four years. Each producer would be required to set aside 15% of this acreage base, but in times of surplus, giant operators would e required to set aside a progressively higher percentage of their base (a disincentive to conglomerate and tax-loss ventures).
4. Promotion of sound conservation practices. Locally-approved conservation practices would be required on all set-aside land. In addition, farmers could participate in a National Conservation Reserve, allowing for the voluntary, long-term retirement of fragile land. The Act would also contain prohibitions against “sodbusting” and provisions to encourage better protection of scarce groundwater resources.
5. Elimination of current disaster payments and disaster loan programs. The current myriad of programs would be consolidated into one simplified approach that offers income protection to producers and protects both consumers and livestock producers from shortage-induced price increases. Each producer would annually contribute a portion (probably 3-4%) of production as an “insurance premium” into a national Farmers’ Disaster Reserve (FDR). In the event of a disaster, a producer would receive commodities from the FDR to compensate for up to 90% of the loss.
The current Federal Crop Insurance Corporation should be expanded to cover perishable commodities, which would be insured for a percentage of the previous years marketings.
6. Increased funding for humanitarian food aid. The USDA would be directed to enter into multilateral agreements with other food-exporting nations to fulfill food aid requirements to needy countries. These multilateral agreements should also mandate that additional emphasis be placed on helping needy nations develop food self-sufficiency to the degree possible, with each exporting nation allocating an amount of cash or other resources consistent with their level of food aid.
7. Increased promotion of export markets. Market development would include increases in export credits, negotiation of more multi-year export contracts, and a “monetary adjustment program” allowing foreign buyers to receive, when available, surplus commodities from government stocks to offset the negative impact of the overvalued dollar.
8. Strong support for domestic food assistance. The program would address the right of every American to a nutritious diet and, through the Food Stamp program, the Women, Infants and children program, and other elderly and child nutiriton programs, would povide adequate assistance to eligible needy families and individuals.
9. Farm credit and debt restructuring. Congress should immediately enact a temporary moratorium on farm foreclosures until the Act takes effect, at which time any foreclosed borrowers would be offered first right of refusal to repurchase any of their land or equipment not yet disposed of. The Act would contain provisions to allow deferral of principal payments for one to five years if the borrowers can project an adequate cash flow by the end of the deferral period to resume payments on the principal.
In addition, the higher price support levels and the FDR crop insurance program in the Act should greatly increase lenders willingness to make operating loans to farmers and should halt the decline in the value of most farmland.
It’s up to us!
The Farm Policy Reform Act can be the 1985 farm bill. It’s up to us. Members of Congress from both parties are looking for an approach that restores prosperity to rural America but reduces the exorbitant costs of current farm programs. A number of them are already committed to fighting for the Farm Policy reform Act. Others have indicated their agreement with the program in principle but have expressed doubts that farmers woud support a mandatory program.
If you want to see this program enacted this year, let your members of Congress know. Show this flier to your family, your neighbors and your local merchants. Have them sign the petition and add a page or two when it’s filled up. Then, whether your petition has one signature or a hundred, send it or carry it to your elected representatives in Washington.
Don’t wait. The farm you save may be your own.
MORE INFO: HISTORICAL FARM BILL PROPOSALS
League of Rural Voters, (IATP), “Beyond the Crisis: Solutions for Rural America,” https://www.youtube.com/watch?v=pEnAZ9_KRRs&list=PLA1E706EFA90D1767&index=8 .
League of Rural Voters, “America’s Stake in the 1985 Farm Bill,” https://www.youtube.com/watch?v=zfgZqgfkxXk&list=PLA1E706EFA90D1767&index=18 .
IATP, NSFFC, “Save the Family Farm Act Discussion,”https://www.youtube.com/watch?v=7kezwLZqgek&index=27&list=PLA1E706EFA90D1767 .