Re: Farm bill winners

W. Tate Heuer (wheuer@quapaw.astate.edu)
Mon, 4 Mar 1996 14:42:02 -0600 (CST)

I agree with you in the lack of justification for decoupling subsidies
from any kind of agricultural production. What this does demonstrate
though is the subsidies have always given more hidden value to landowners
than to the actual farmer (If you look % of land being farmed and owned
by farmer is not that high.) The idea is this magical 7 year period will
gradually adjust land values, and not cause the financial havoc that
would have occurred from doing it all at once. This idea is going to be
hard to sell to the public because it blatantly appears to be welfare for
landowners. This just demonstrates the agrarian myth that subsidies only
helped farmers. It set a floor on the price of output that was produced
from the land and a farmers efforts. The subsidies do as much if not
more to increase land values as they do a farmers profit. It could be
argued that any increases in revenues will be incorporated into land
values. The more profitable the operation, the higher the rent that
could be justified.

What I don't see about your point is how the new policy will cause
farmers not to look as closely at input costs. A dollar unnecessarily
spent will still result in a dollar lost. In fact since the decoupling
any increase in an expense that results in higher yield will not be
rewarded with any subsidy money, as their levels are fixed on a per acre
rate set on past production.

Also, to answer your last question about equipment, chemicals, and
technology, we cannot turn the clock back. Farmers are paying with the
new technology, and they are buying it, with increased yields instead of
increased prices. If we want more sustainable agriculture it will have
to be economically sustainable, and if in the short run it is not
competitive either the consumer or the government will have to take
action for it to be effective. And I strongly believe agriculture needs
to be more ecologically sustainable. I agree the farm bill should
address issues like these, and I don't necessarily believe what they
passed is counterproductive, it just hasn't addressed near all the
problems that need to be. By this I don't believe all of the answers
should or will come from the government, but they should be discussed
with meaningful debate at the least. And only the future can fully answer
all of these questions.

Tate
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On Mon, 4 Mar 1996 Danamx@aol.com wrote:

> Dear Willie,
> In general US legislation over the past decades has favored increasing
> coroporate control in agriculture and brought direct and indirect benefits to
> suppliers of inputs. Organizations such as the National Family Farm Coalition
> and such can probably direct you to detailed information. I think Pesticide
> Action Network also has written about laws that essentially work as subsidies
> for chemical use. I think the worst part of this current bill is the
> "decoupling" idea, which probably won't work, I hope. This has the effect of
> further hiding the direct costs of chemical inputs by removing economic
> incentives for controling input costs; only big corporate farms will be able
> to benefit from it, I suspect. In general, all legislation, technical
> assistance etc., that favors high input agriculture is a handout, at
> taxpayers expense, to those who sell the inputs.
> Last year a wheat farmer from Idaho told me that I should be thankful to the
> chemical and farm equipment companies because thanks to "modern technology"
> the price of wheat has not gone up in 25 years and the average American only
> spends 10% of his income on food. I wondered, though, if gasoline, tractors,
> fertilizers, pesticides and everything else used in farming has increased in
> price, where is the money to pay for those things coming from? And who is the
> big winner? Your food bill might be nice, but have you looked at your tax
> bill lately? Where is the sustainability in that system?
>
> Ronald Nigh
> Dana Association
> Mexico
>
>