Agricultural leaders in the U.S. House of Representatives and the U.S. Senate are taking quite different tracks in looking at proposals to rewrite the Freedom to Farm Act, which expires in 2002.
“That divergence has many in the farm community very nervous about the implications for 2001,” said Abner Womack, who has provided policy analysis for five farm bills over the years.
But, Womack, co-director of the Food and Agricultural Policy Research Institute (FAPRI), sees optimism where others see pessimism.
“The House is really pushing to do something, soon, on reforming farm legislation, and is looking for a safety net to add to the farm bill. A major change of the 1996 act was decoupling crop production from government payments. That, in turn, gave farmers more independence from government management.”
“There is still strong opportunity for something to be done for agriculture this year,” Womack said during an interview in his office at the University of Missouri
Many agree that additional appropriations will be needed in the agricultural sector. The most recent FAPRI baseline shows a $9 billion drop in income by 2002, if the current farm bill is not changed. That lends support for the idea of additional appropriations, Womack said. “The situation is serious, especially in the crop sectors, and with the implications of higher fuel costs,” he said.
The agricultural committee in the U.S. House of Representatives, headed by Rep. Larry Combest, R-Texas, is holding hearings this year and has asked for proposals for modification of the existing FAIR Act passed in 1996.
However, the leadership of the Senate agricultural committee, headed by Sen. Richard Lugar, R-Ind., has indicated that hearings to rewrite the farm bill will not occur until 2002 near expiration of the farm legislation. The Senate has held hearings on the agricultural situation.
“The House is really pushing to do something, soon, on reforming farm legislation, and is looking for a safety net to add to the farm bill,” Womack said. A major change of the 1996 act was decoupling crop production from government payments. That in turn gave farmers more independence from government management.
“Mr. Combest is holding hearings in a way that we've never seen before,” Womack said. “He is asking everyone who testifies to come with an analysis on their proposal.
“The committee wants to hear a five-year projection of the cost of the programs, what the implications are for other commodities, and the impact on the export markets under the proposed change.”
Womack sees this analysis as a step in the right direction.
“This is a very serious look at the farm bill,” Womack said. “If you want to change, what is your plan? What will it cost? And, what will it do to others?”
Womack sees the Senate not as inactive, but on a different track. “It is not unreasonable for the House and the Senate to take different approaches,” he said.
“This leaves those on the Senate side to concentrate their efforts on something like the supplemental emergency payments we've seen the last three years.”
If the House reaches agreement on a modification to the farm bill, the Senate can react.
“If the House does not reach a consensus, then the Senate can start proposals for emergency payments,” Womack said.
“Either way, bases are being covered in both directions. It may not be as negative as some assume it to be. I see checks and balances in the works.
“I find that to be a strong position for agriculture this year.”
Womack sees other positive points in the farm bill discussion.
First, the legislators have started early in their study of the possibilities. “This has given us more lead time than I can ever remember in looking at the options.
“Second, this has been a more analytical consideration. Those testifying in the House hearings are asked to take a broader view than for just their own commodity.
“This is one of the most serious attempts to look at a farm bill, as regards to the analytical requirements,” Womack said.
Overall, there has been agreement on keeping several key features of the Freedom to Farm Act. The decoupling of payments, the removal of set-asides, and the elimination of recourse loans that took in stocks into government holdings, which keeps stocks on the open market are features that the farmers like.
All of that has led to freer competition in the world markets.
The proposals for change would add a counter-cyclical element in the act, which provides for bad economic times, Womack said.
“When visiting with farm groups, I hear a lot of agreement on what they like about Freedom to Farm,” Womack said. “And, there's agreement on the need for the counter-cyclical element.
“Now, it's a matter of analyzing those alternatives for adding help in bad years,” Womack said. “History shows us that agriculture will need some outside help in about four out of 10 years.”
The last farm bill was budget-driven, which limited the amount of money available. “The FAIR Act simply did not have adequate financial support for years of bad prices and income,” Womack said. “Now, there must be discussion on how much money is required to sustain an agricultural program in the United States.”
FAPRI is supported by the U.S. Congress to provide independent policy analysis for agricultural legislation. The institute is allied with agricultural policy analysts at other universities. The MU unit maintains a computer model of the U.S. farm economy. A sister institute at Iowa State University maintains a model of international agriculture. A center at Texas A&M studies the impact of federal agricultural policy at the farm level.
Duane Dailey is the news coordinator, Extension & Ag Information, University of Missouri.