In the context of a Congress bent on slashing spending, the question has already been asked: Why do we fund farm supports? Or “handouts,” if you prefer a harsher definition of the more than $20 billion annually shelled out to U.S. farmers under the auspices of USDA’s various market support, resource conservation and rural development programs.
Those who support farm subsidies point out that those programs help maintain food production, and thus food security, when low farm-gate pricesimpact highly leveraged farmers and producers—which includes just about anyone serious invested in agriculture these days.
But the justification for continuing to pour funding into national farm programs is even simpler, although little effort is made to educate the public about this rationale. It is this: agricultural production does not respond to market signals as other, less essential production does.
In other words, people don’t stop eating when food prices experience a spike. Thus, during a low pricecycle, producers and commodity buyerstend to base production decisions on unrealistically low prices. When prices then surge as investors and speculators bid up commodity futures—or when the supply-demand equilibrium is upset—rapidly rising priceswreak havoc on livestock producers, meatpackers and poultry processors, the ethanolindustry and other food sectors dependent on farm commodities.
Market support payments are designed to smooth out the swings in commodity pricing and maintain a vital food production sector as a necessary component of national security.
At least that’s the theory.
But it’s one the Republican-controlled Congress is loath to accept. Already, the 2012 House agricultural appropriations bill cut $2.7 billion from the previous year’s funding, slashing $760 million from conservation programs, $686 million from domestic feeding programs, $354 million from ag-related research, $337 million from rural economic development funding and $285 million from food safety appropriations.
No matter where you stand politically, that kind of budgetary surgery certainly isn’t timely, given the urgency of both short- and long-term agricultural productivity to feed a surging world population.
So why do politicians—and a large cross-section of the citizenry—consider federal farm bill funding to be such a “target-rich environment’ for spending cuts? There are three reasons:
First, only 2% of the population in the United States is directly involved in farming and livestock production. Politically speaking, that’s not a very potent constituency, at least not in terms of electioneering, which is why our elected officials generally pay scant heed to production agriculture and farm-related issues.
Second, much of the subsidies and market payments that flow from farm bill programs end up in the pockets of relatively wealthy farmer and ranchers. As former USDA Secretary Mike Espy once famously said, “If you’re a farmer, and you qualify [for the programs], you get a check.” That makes it easy for the public to take offense at the billions that are targeted to various support programs.
Third, and most importantly, the problem with the farm bill is that it’s become a hodgepodge of programs, perks and payments meted out according to guidelines that rival the tax code in their complexity. Everything from conservation efforts, to rural development, to disaster relief to nutrition and feeding programs have been limped in with market support payments such that there’s something for everyone to hate when the multi-year, multi-billion dollar legislation comes up for a vote every four years. Critics point out that farm state legislators long ago struck a “deal” with their urban colleagues to lard the farm bill with enough social spending for food stamps, senior and child nutrition and other feeding programs that a quid prop quo can be agreed on to push a relatively intact farm bill through each quadrennium.
But the result is that the farm bill becomes a bloated, overstuffed monstrosity just waiting to be chopped up like dry kindling. That leaves three critical program areas dangerously open to damaging cutbacks:
Conservation. From the Farmland Protection Program to the Conservation Stewardship Program, farm bill funding support vital protection for vast amounts of the nation’s arable land base and water resources. These programs received increased funding last time around in 2008, but face drastic cuts at a time when resource limitations loom more ominously than ever.
Agricultural diversity. Currently, most of the more than $20 billion of annually spent on subsidies is targetedto corn, cotton, rice, wheat and soybeans. That’s not necessarily wrong, but it leaves smaller farmers, specialty producers and growers of virtually all other crops are a distinct disadvantage. At the same time, with urban sprawl swallowing up farmland at frightening rates, keeping ranch and farmland in production is vital for our long-term food security.
Research. For more than 150 years, land-grant universities have delivered an incredible return on investment for American taxpayers. Crop and animal science research has helped U.S. food productivity achieve stunning success. But because of the emphasis on the major commodity crops, far too little time, money and personnel have been devoted improving so-called “minor” crops, such as sorghum, barley, oats and a host of fruits and vegetables. Plus, the private sector cannot, and will not, make up any gaps in funding, especially when the payback from commercially viable developments isn’t rapid enough.
The farm bill should be a cornerstone of public sector efforts and investments to promote the cultivation and consumption of domestically produced foods, keep rural America economically viable and to incentivize farmers and ranchers to undertake projects that protect the environment and help conserve natural resources of soil, water and wildlife habitat.
Everything else should be stripped out and dealt with separately. Otherwise, the good that come from prudent investments in agriculture’s productive capacity could be undermined.
Dan Murphy is a veteran food-industry journalist and commentator