February 3, 2006
AFBF delegates: Stay
By Mike Barnett
Delegates at the American Farm Bureau Federation annual convention voted to stay the course on the current farm bill and to carry its major provisions into the 2007 version.
"In general, we were satisfied in that we wanted the structure of the 2002 farm bill to continue, and that's basically how the delegates voted," said TFB State Director Bobby Nedbalek, who also heads the organization's Farm Bill Advisory Committee. "We (the Advisory Committee) haven't really formulated a policy for Texas, yet. But we're pretty much in agreement that at least the structure of the 2002 farm bill is good, knowing there will be some WTO (World Trade Organization) influence as the next bill is developed, just as there was in the 2002 bill. The 2002 bill was compliant with circumstances at that time."
Bob Stallman, American Farm Bureau Federation president and former president of the Texas Farm Bureau, said the economic safety net the current farm bill provides is necessary until a new world trade agreement is reached to increase foreign market access for U.S. farmers and ranchers.
"Our members continue to say they are willing to negotiate about lower domestic support payments if, in exchange, they can secure increased opportunities to sell their products overseas," Stallman explained. "However...they are not willing to unilaterally disarm. Any revamping of the farm safety net must be done in concert with a WTO agreement that reduces tariffs and grants market access, increases tariff rate quotas, reduces trade-distorting supports and eliminates export subsidies."
George Caldwell, TFB associate director of Commodity and Regulatory Activities, agreed that TFB delegates were willing to trade domestic supports for freer markets. A big concern of his however, is that the Bush administration hold the line and not give up the safety net the current farm bill provides, unless other countries make major trade concessions.
"There's the concern that the administration doesn't give up the ship before we get there," Caldwell said.
Nedbalek said producers, knowing the devil is in the details, worry that the market might not be responsive enough if the U.S. agrees to trade changes, "but we would approach that with cautious optimism."
"You need traffic rules to keep order on the highway," Nedbalek said. "WTO rules are those things that kind of give us hope in having fair trade. Whether it's equal or not seems to be questionable.
"It's really hard to know how different rules impact specific commodities. You can change things and maybe solve one commodity's issues and problems and say it's better than it used to be, but it may be disastrous to another commodity. The trade world is so complicated that it's very difficult to grasp the whole picture."
A major area of disagreement in the farm bill policy debate was payment limitations, with delegates ultimately reaffirming opposition to those limits.
"The payment limit discussion has always been a concern," Caldwell said. "In the south, where higher input costs are a challenge, payment limits become a bigger challenge. That's why there's always been a focus on trying to keep from having payment limits."
Delegates also supported creation of "an energy escalator clause" in farm policy due to the impact of higher fuel and fertilizer costs on farm profitability.
"Farmers are feeling the pain of rising input costs, including energy prices, and fertilizer prices that have tripled in just the last few years," said Stallman. "They are clearly looking for relief from costs pressures, which they cannot pass along to their customers."
Caldwell said the Texas delegation was firmly behind the energy escalator clause.
"Texas delegates had a big concern that energy costs need to be factored into the farm bill program, especially when the program was designed when input costs were on a completely different level," he said. "When you look at the impact of energy on fertilizer, on all petroleum- based products, it has a huge impact on agriculture."
Meanwhile, Nedbalek said TFB's Farm Bill Advisory Committee will continue to gather information as the new farm bill takes shape, and will voice their concerns.
"As a group, we have a good feel for the circumstances and situations in the farm bill on different commodities," he said. "It's really too early to put a plan in place. We need to see what rules the WTO develops and how our government here and governments in other countries respond to those rules."
AFBF delegates adopted the following concerning future farm bill design:
"We support extension of the current farm bill until a new World Trade Organization (WTO) agreement is reached. We support extending concepts of the Farm Security and Rural Investment Act of 2002 into the next farm bill. However, if changes are necessary, consideration should be given to the following:
"1) Reduced complexity while allowing producers increased flexibility to plant in response to market demand;
"2) Maintenance of a farm income safety net while encouraging efficiency;
"3) Driven by the needs of production agriculture;
"4) Be compliant with WTO agreements;
"5) Provide a Green Box compliant compensation program for fruit and vegetable growers. If this is not accomplished, we oppose elimination of the planting prohibition; and
"6) Trade distorting domestic support (Amber Box) may be reduced in exchange for an economically proportionate increase in agricultural market access and elimination of export subsidies. Such reduction in U.S. Amber Box supports should be offset by a transfer to fully funded Green and Blue Box eligible programs. This could be accomplished through working lands conservation programs, risk management, the Market Access Program (MAP), enhanced crop insurance, revenue assurance or government programs that increase producer profitability that may include direct payments."