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Texas Agriculture Archive

June 4, 2004

2002 Farm Bill is working

By Kenneth Dierschke
Texas Farm Bureau President

The Farm Bill of 2002 is working. There's no other way to slice it; no other conclusions possible.

On May 20, it was my honor to testify for the American Farm Bureau Federation before the U.S. House Agriculture Subcommittee on General Farm Commodities and Risk Management. Lengthy written testimony was filed, and I had the opportunity to speak for five minutes, and take questions from the members of the committee.

The Farm Bureau message was, and is, quite simple: opening the farm bill would be a huge mistake.

Key to the farm bill and to Farm Bureau's policy is the concept of a "safety net" to protect U.S. national food security. In a perfect world, U.S. farmers would have unfettered access to markets across the globe. In reality, U.S. products are penalized by high subsidies imposed by our major competitors and by heavy tariffs. Tariff's on U.S. goods average more than 60 percent worldwide, while tariffs on goods entering our country average about 14 percent.

The farm bill's formulas are set up to be "counter-cyclical." This means that the safety net kicks in when market prices are low. Payments are reduced when market prices go up. When the farm bill was written two years ago, commodity prices were near record lows, and agriculture was in deep trouble.

What a difference two years can make! Net farm income in 2003 was almost $20 billion more than 2002. This year's income is projected to be about $12 billion more.

Farm bill spending is substantially lower than the Congressional Budget Office's scoring for the first three years. CBO says the actual spending level for the bill is $15 billion less or 30 percent lower than when the bill became law. Next year should be far short of those original spending targets as well.

It should be noted, however, that there are storm clouds gathering over the horizon. That is the rapidly increasing costs of energy and petroleum-based agricultural inputs. It bears watching, and makes the farm bill even more important.

The World Trade Organization's initial ruling against U.S. agricultural supports was a setback, but that fight is not over, and Farm Bureau believes we should not act unilaterally. Instead, we believe the final WTO verdict should be known before any changes are considered. We would prefer to negotiate a WTO agreement that accomplishes our objectives with respect to domestic supports, and then modify domestic programs accordingly.

We remain opposed to payment limitations, but we can live with those already in the farm bill. We will fight any attempts to lower payments because that defeats the purpose of the farm bill, punishing our most productive producers. If limitations on benefits are made more restrictive, those farmers would not benefit from the improved safety net.

It's also a plus that the 2002 Farm Bill was the most environmentally-friendly farm legislation ever passed by Congress. This is important because the cost of complying with environmental regulations continues to be a very expensive part of many farming and ranching operations.

We believe agricultural producers must receive assistance to help defray the cost of ongoing environmental improvements and regulations. The Conservation Security Program (CSP) will assist farmers in achieving environmental goals and reward us for improved environmental performance. CSP should be available to all producers and it should be funded and implemented as a nationwide program.

One other group receives support from U.S. farm policy. Consumers may be the biggest beneficiaries of all. By sharing the considerable risks of farming, the government ensures that prices remain relatively low. Safe, healthy and cheap food is the legacy of U.S. farm policy!

It is expected that other nations will routinely attack our farm policy, precisely because it is working so well. It is disturbing, however, that more and more, we must defend it here at home. If we unilaterally surrender our farm program, we will "outsource" the ability to produce food and fiber. U.S. farmers cannot compete against the treasuries of foreign governments that are determined to protect their agriculture no matter what the costs.

If your two-year-old pickup is running fine, it doesn't need an overhaul, and the machinery of the 2002 farm bill is running very well.