Freedom to Farm vs. the Environment: The Ecological Implications
Mark Ritchie, President, Institute for Agriculture and Trade Policy
April 25, 1996
"With a mix of luck, work and unusual organization, the lobby for big grain
companies, railroads, meat companies, millers and shippers scored a big win
in the Senate-passed overhaul of farm programs."
Associated Press, February 18, 1996
Congress and the President have agreed on a new farm bill, euphemistically
called the 1996 Federal Agricultural Improvement and Reform Act. The FAIR
legislation, also called Freedom to Farm, was based on the original
decoupling proposal first made in 1985 by former Minnesota Senator Rudy
Boschwitz (R-MN). "Decoupling" refers to removing the link between direct
payments to farmers and production.
The good news is that this bill contains a number of important programs to
protect nature in some fragile eco-systems and to promote sustainable
farming practices in a number of ways. However, the overall impact of the
bill is to accelerate the drive towards industrial-type, chemical and
energy intensive agriculture while devastating the financial structure of
many small and medium-sized family farmers. Overall, it makes farming in
the United States less sustainable from both an environmental and an
economic perspective. This article is a brief summary of the potential
ecological implications. I will prepare an analysis on the economic
implications in the near future.
The major provisions of this bill are as follows:
1) Farm price supports are frozen at current levels for crops, which is
$2.58 for wheat and $1.89 for corn, minus the shipping basis. In dairy, the
price supports will fall to only $9.90 by 1999. These so-called "loan
rates" will set the prices that farmers will receive in the marketplace
when current shortages are overcome.
2) Deficiency payments are replaced with "transition" payments that would
be guaranteed, no matter what happens to crop prices or production, and
would be phased out over the next seven years. These payments would be
based strictly on past production history, and not tied to any
environmental performance, set-aside or land use requirements.
3) Supply management programs would be eliminated.
4) A 34 million acre upper limit on the Conservation Reserve Programs, with
provisions that make it possible for the Ag Secretary to cut the program in
5) Marketing loan export subsidies are enacted for commodities with
Commodity Credit Corporation (CCC) loans.
The environmental devastation that will come from this farm bill can be
grouped into nine major areas:
1) Increase in land under cultivation
Recent farm legislation has allowed farmers to fallow over 75 million acres
over the past few years. With a 34 million acre limit on the Conservation
Reserve Program (CRP) and the abolishing of all other set asides, this will
bring 40 million acres of land back into production. In addition, an
early-out provision for the CRP will most likely result in highly erodible
land coming into production and being cash rented to take advantage of the
current higher prices. Even in the first month after the passage of this
bill, it is already possible to see the clear cutting of windrows and small
stands of forests as the provisions that eliminate set-asides become known
2) The land that is farmed will be farmed much more intensively, using more
chemicals and fertilizer.
Gary Meyers, of the Fertilizer Institute, was one of the earliest and
strongest supporters of "decoupling," because he knew it would lead to
sales of chemicals and fertilizer. First of all, there will be more land
farmed. Second, there are incentives to intensify production at both the
current higher price levels, and in the future after the current supply
shortage is overcome and farm prices fall again to very low levels. Unless
there is some form of supply management that is based on quantitative
measures (e.g. marketing quotas), farmers will maximize their production
per acre to try to increase their income, using more fertilizer and
pesticides in the process.
3) Farm prices will eventually fall, probably at the same time that
government payments will be eliminated, leaving farmers with less income.
As farm payments are phased out and as prices return to low levels, farm
families will end up with less income, especially since the "floor prices"
provided by the Commodity Credit Corporation loan rates will have been
severely reduced or eliminated. This will make it difficult to maintain
soil and water conservation programs or to take the "risk" that conversion
to more sustainable practices often entails. At the same time, when farm
income falls, farmers are less able to invest in vital soil and water
4) Some conservation programs are weakened or eliminated.
A number of important programs, including conservation compliance and
swampbuster provisions are weakened. At the same time, many provisions are
made discretionary and are moved to a farm-to-farm basis instead of an
operation-to-operation basis. Most programs do not include herd size or
The Conservation Reserve Program has been capped at a maximum of 36.4
million acres. It now has provisions for farmers to withdraw from the
program prior to the end of their ten-year contract, which will result in a
great deal of fragile land being put back into corn and wheat production.
Some analysts estimate that up to 22 million acres (out of 34 million) of
currently enrolled land could be put back into production. Much of this
could end up becoming cash-rented for continuous corn production. In
addition, the Secretary of Agriculture is prohibited from imposing any
higher standard for environmental protection on the lands that are coming
out of the CRP than on other land in conservation compliance plans, even
though the land in CRP may be much more fragile and highly erodible. The
Wetlands Reserve Program will be significantly weakened, including
provisions to make most of the easements temporary instead of permanent,
and limitations on how much land can go into the program.
Haying and grazing will be allowed without restriction or environmental
requirements on all land not in the CRP, and the land in the CRP could be
freed up for haying or grazing at the discretion of the Secretary of
Agriculture. If we end up having the corn-belt drought as is now being
predicted, we will need to carefully manage the grazing of these lands to
ensure long-term sustainability, not just abandon them to maximum
exploitation. Conservation easements are now prohibited on farmland
repossessed by the federal government if the land has been recently farmed.
5) Families on the land will be replaced by corporate and/or absentee owners.
In the past few years we have seen an explosion of corporate owned and
operated factory hog farms, cattle feedlots, and poultry operations. All of
these have had the effect of pushing farm families out of business. As the
Freedom to Farm Act moves forward, many other family farms will go out of
business. Smaller producers will be replaced by lenders, absentee owners,
and much larger, capital-rich producers -- all with the economic means to
increase fertilizer and chemical use enough to survive under "decoupling"
policies. The level of farm bankruptcies and foreclosures will rise
dramatically under Freedom to Farm.
6) Diversified livestock producers will be replaced by large-scale feedlots.
Higher feed prices are putting severe financial strain on all livestock
operators. However, it appears that the larger, corporate feedlots have
the financial resources to hold on, while small producers will be forced
out. Under normal circumstances, livestock prices would eventually rise.
Unfortunately, with the elimination or weakening of import controls under
NAFTA and GATT, cheaper meat imports have kept livestock prices down.
Large scale corporate operators with deep pockets will be able to survive,
but smaller producers will be pushed out. When feed prices fall to lower
levels again in the near future, these corporate operations will be able to
complete their domination over the livestock sector. The ecological
consequences of consolidation of our livestock and poultry sectors into a
handful of gigantic operations will be dramatic.
In addition to the on-site environmental hazards, the concentration of
livestock into large-scale units brings additional problems with diseases.
Already this has fostered an increased reliance on antibiotics and the use
of nuclear irradiation to control threats to human health. These
large-scale producers are also the major advocates of legalizing growth
hormones and stimulants.
7) Federal government budget costs will continue at very high levels,
reducing funds for sustainable agriculture and conservation programs and
creating ill-will among the public toward farmers and farm programs.
The highest payments under Freedom to Farm will come in the first years,
precisely when grain farmers will have record high prices. This high level
of government outlays over the next couple years will both limit the funds
available for spending on other agriculture programs and look terrible to
the public. Farmers will receive a large check from the government on top
of the highest prices in recorded history. There will be little or no
effort to link either the payments or the prices to increased environmental
protection. In fact, it is likely that the opposite will be true, that the
higher prices and the fact that the payments have no requirements and will
be gone after seven years may even lead to more degradation as farmers
scramble to maximize income before retiring or selling out at the end of
the seven years.
Each year there will be a budget battle over these farm programs, making it
likely that there will be cuts to these and related programs, such as
important soil and water conservation programs that have been among the
first items cut or reduced.
8) Existing small and medium sized producers of non-program and specialty
crops, who are often better stewards of the land, will be subjected to
intense pressure by the shifting of land now in set-asides or other crops
into their crops.
Freedom to Farm, by providing a guaranteed payment to producers of
traditional commodities, such as corn, wheat, and soybeans, will enable
farmers to divert some or all of their land to growing "non-program" crops.
Many of the small farmers who now rely on the income they receive from
"non-program" crops fear that the shifting of acres into these crops will
create surpluses and ruin prices. Fortunately, there are some restrictions
on shifts to some fruit and vegetable crops depending on the history of the
farm and the region.
9) Conversion of agricultural lands to industrial and commercial uses
The displacement of family farmers that will occur under Freedom to Farm
could mean an acceleration in the pace of conversion of greenbelts and
farmland to shopping centers, suburban housing developments, and industrial
facilities. Agriculture land owners will receive the payments, whether or
not they or their tenants plant crops. When payments drop off, or farmers
cease to farm, there is no incentive to keep the land for agriculture
Comments and Criticisms Welcome
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Institute for Agriculture and Trade Policy
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