Plowed Under The End Of Farm Subsidies May Be Near

By the time lawmakers in Washington are done, many programs that have babied and bullied U.S. agriculture for more than 60 years will be unrecognizable, if intact at all.

Although the debate is far from over, a congressional compromise on the federal budget is calling for historic reform of farm policies that had their start during the Great Depression.

Recently vetoed by President Clinton, the budget package would cap and phase down farm spending over the next seven years and dismantle much of the structure of current commodity programs that try to manage supplies and manipulate prices of wheat, corn and other crops.

“Clearly, American farmers will receive less farm income from the government,” John Keeling of the American Farm Bureau Federation said in October, in anticipation of the changes.

“We’re also going to see planted acres increase. We’re going to see farmers more vigilant, more interactive in the world market.”

While reformers have made headway in previous farm bills, nothing has come close to the changes lawmakers settled on this fall.

Although momentum for an overhaul has been mounting for more than a decade, political observers and agricultural experts say many elements converged this year to push reform to the forefront.

More than at any other time, money was a driving force, they said, as a Republican-led Congress pledged to balance the federal budget by 2002.

The budget-balancing mandate displaced the usual nitpicking over details of complex, specialized commodity programs with a broader review of farm policy’s role in the economy.

But much more than budget pressures were involved.

Studies have repeatedly found that farm programs with roots in the far different domestic economy of the 1930s are outdated and irrelevant in the context of the global economy of the 1990s.

In just the last 10 years, many events have accelerated that change: Global demand for food is on a robust, steady growth trend; grain supplies are dropping to alarming lows as consumption regularly outpaces production; and grain prices are higher and climbing.

All these factors are seen by many people as contributing to the making of new farm policies.

The Farm Bureau’s Keeling said, referring to the House Agriculture Committee chairman, “Pat Roberts is right: The status quo doesn’t live here anymore.”

The real budget question should be: What produces more value for taxpayers, farmers and all of agriculture?

Policymakers need to ask whether current federal farm programs or the proposed reforms will put agriculture on a sounder, more independent, more reliable footing.

The answer is that the farm-policy reforms in the budget compromise offer a bigger bang for the buck.

Current federal farm policies ran out of steam long ago, bypassed by technology that changed how farmers grow crops and by globalization that is changing for whom they grow them.

The 1930s idea that a government could control the price by managing the supply of a certain crop, like corn or wheat, has been systematically disproved.

Technological advances have raised productivity even as improving storage and transportation infrastructure has opened up markets far from home.

Those innovations were not exclusive to the United States, as a bushel of wheat or corn not grown in this country because of the U.S. government’s attempt to reduce supplies will be grown somewhere else.

That’s why soybeans grow today where rain forests once stood.

Global demographic changes also show the nearsightedness of old programs.

The global population is nearing 6 billion at a rate of 90 million more consumers a year, many of them in areas with limited ability to expand food production.

Incomes are steadily marching upward, giving areas with fast-growing populations and slow-growing food production more money to improve their diets with imports of cereals, vegetables, fruit, meat, dairy and processed foods.

As people migrate from poor, rural areas to cities in search of better education and jobs, they also begin to buy, not grow, food.

In addition, the post-World War II trend toward freer trade will be sending a tidal wave of commerce across national borders in the 21st century.

Agriculture will benefit greatly from that growing exchange between efficient producers and hungry consumers, both because of accelerating economic growth and declining barriers to farm trade.

This year’s U.S. farm-policy decisions can accelerate global agricultural reform. Other countries, too, face tighter budgets that are limiting their ability to subsidize bad agricultural policies.

Awareness that those bad policies burden taxpayers, penalize consumers and handicap efficient farmers is growing.

With U.S. leadership, the next round of global trade negotiations at the end of this decade will be devoted not to whether to liberalize agricultural trade, but how fast to do it.

At its heart, the farm-policy debate involves coming to terms with the real world.

As economies develop, food demand grows and diets become more diverse. The global agricultural trading system will become more important in satisfying that demand.

The “freedom to farm” approach embraces that reality and lays the foundation for allowing U.S. farmers to benefit from those very real opportunities.

True, the budget-reconciliation process has left some commodities trapped in the grip of old programs, their day of reckoning delayed.

And the Conservation Reserve Program still needs reforms that focus on protecting the most fragile, least productive land, while restoring nonerodible acres to responsible cropping.

That issue has more immediacy than some policymakers may realize.

With the global grain larder dangerously low, at least 10 million acres of productive, viable land, now idle in the CRP, need to be cultivated next year to help feed a hungrier world and replenish supplies.

But those problems can be fixed, either with administrative action or additional farm legislation next year.

The first step is to complete an agreement that balances the budget in seven years and that delivers the proposed farm-policy reforms.

Freedom is so close farmers can almost taste it.

Graphic: Cuts ahead for farm subsidies

MEMO: Wendy Tai, Linda Thrane and Rob Johnson work in the public-relations department of Cargill Inc., a privately held agribusiness.