Little change to ag policy, even as Peterson loses chair

by Mark Steil, Minnesota Public Radio

…Farm subsidy programs have grown steadily since beginning more than 70 years ago during the Great Depression.

Last year, federal farm programs paid over $850 million to Minnesota farmers. Nationwide the subsidy bill was over $15 billion.

William Yeatman of the Competitive Enterprise Institute, a Washington-based think-tank, said he would love to see those payments reduced.

As a free-trade advocate, he wants the open market to decide who makes money, but even though Yeatman really dislikes the farm program, he doesn’t see much change coming. What’s more likely to happen is that last Tuesday’s Republican wave will break and dissolve against the rock solid shore of the congressional farm lobby, he said.

“They are the undisputed champions of all lobbies. The amount of influence they can exert, it is incredible and it never ceases to amaze me,” he said.

Much of that strength derives from the almost iconic stature the farmer holds in American culture, Yeatman said. Like the soldier, the police officer or the firefighter, farmers are often viewed as heroes, so any proposal to cut funding is seen as hurting an American institution.

In fact, far from producing major change, Yeatman said there might be even less likelihood of a new agricultural direction with Republicans in charge of the House.

He uses the direct farmer subsidy as an example. Those payments are among the most controversial parts of the agricultural program because they’re paid even when a farmer makes substantial profits in the open market.

Right now, for example, corn prices are high. Farmers will make big money on their grain, but despite that financial windfall, they’ll still get a federal payment for their corn acres.

Peterson favored looking at ways to reduce direct payments but, Yeatman said, the incoming chair, Oklahoma Republican Rep. Frank Lucas, seems resistant to any reduction.

“He’s on the record as preferring direct subsidy programs,” says Yeatman.

Lucas sent a letter to U.S. Agriculture Secretary Tom Vilsack in early 2009 saying it would be “irresponsible” to even think of eliminating direct payments.

One early test of how the new Congress feels about farm payments could come on the issue of funding renewable energy programs like corn-based ethanol. Several subsidy programs for ethanol and other fuels have expired or are about to expire.

Farmers generally like the fuel subsidies because they boost the price of corn and other grains. If Congress votes in favor of continuing the ethanol subsidies, it could be a signal of how they will handle farm spending overall.

Our Take:
We think anyone who wants to overhaul the current farm program ought to take all their money out of savings, sink it in a farm operation for a year or five, and then get back to us after that.

With all due respect to Mr. Yeatman’s opinions, farming is a business unlike any other, where the price of both the inputs and the product is beyond the control of the producer. We tried free trade in agriculture. It was called the Dust Bowl.

Every developed economy in the world has an ongoing social contract with its farmers, regardless of these various societies’ approaches to other segments of the economy. While experts may be right in stating that the US farm program has grown, what they conveniently leave out is how much farm productivity has grown, thanks in large part to a smoothly functioning safety net. Direct payments keep independent farmers on the farm. Despite talk of factory farming, 98 percent of American farms are owned by individuals, families, or family-owned corporations (usually just two or three family members).

Minnesota farm leaders had an opportunity to visit with Rep. Frank Lucas, an Oklahoma Republican, this summer at the Minnesota Agricultural Leadership Conference. Lucas is presumed to be the next chairman of the House Agriculture Committee. It is clear that Lucas has good will towards farmers and is ready to listen to our concerns. That’s a good thing, and reassuring. For the past several years, Minnesota Democrat Collin Peterson has been a steady hand at the helm of House Ag, in some of the most fast-changing times American farmers have ever seen. We hope Peterson can continue to be a major influence as ranking minority member of the ag committee.

A final thought about the farm program and ideas of ending or reducing government support of farmers. American crop producers today harvest five times more crop per acre than they did before the farm program. What makes this possible is a vibrant public-private partnership. Independent farmers, the agribusinesses and ag science businesses that serve them and the US Farm Program all fit together. The machine is working well, judging by such results. For instance, average corn yield in the 1930s was about 30 bushels per acre, whereas today, the yield exceeds 150 bushels per acre.

Call changing that foundation provided by the US Farm Program whatever you want. We call it foolish. We hope the MPR correspondent’s pundits are correct in their analysis and conclusion that the US Farm Program will not change much under the Republicans.

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