- Farm Programs Final Target of GATT Budget Cuts
- Congressional SAWG Plans to Pressure USDA
- Anthan Sees Little or No Change Ahead
- Economists Call for New Farm Spending Focus: Developing Markets,
Processing Subsidies
- Poll: Farmers Favor Supports for Small to Medium Size Producers,
CRP
- Researchers Contend CRP Expiration Will Steady Grain Prices
- RESOURCES, EVENTS
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Farm Programs Final Target of GATT Budget Cuts
Treasury Secretary Lloyd Bentsen outlined a $12.3 billion package of
spending cuts and tax increases last week to help pay for the costs of
implementing the GATT Uruguay Round. Most of the $8 billion
spending cuts are reportedly to come from reductions in farm
support payments, and by drawing on a $2 to $3 billion budget
accounting surplus.
The Senate Finance Committee began July 19 its consideration of
draft legislative proposals to implement GATT. The House
Agriculture Committee met Tuesday to begin mock mark up of
legislation to implement GATT agriculture provisions.
Sources: "Bentsen Details 12.3 Bln Dlr GATT Funding Package," EXTEL
EXAMINER, July 19, 1994; "Administration Says GATT Funding
Proposals Open to Modification," BUREAU OF NATIONAL AFFAIRS,
July 20, 1994.
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Congressional SAWG Plans to Pressure USDA
The Congressional Sustainable Agriculture Working Group (SAWG)
met last Friday to discuss moving forward on farm bill policy-making
recommendations and to follow up on demands made last March for
greater cooperation between the USDA and congressional members
during the upcoming farm bill debate.
Founding Congressional SAWG members, Representative Sam Farr
(D-CA) and Representative Charlie Rose (D-NC) wrote to USDA Deputy
Secretary Richard Rominger March 9 in support of several requests
made by regional SAWG, farm and environmental organizations
during the National Dialogue. Congressional SAWG members say
they are still waiting for a response to their March letter which calls
on Rominger to:
%establish a Sustainable Agriculture Coordinator position within the
USDA office;
%establish a USDA policy statement and mandate for sustainable
agriculture; and
%establish clear mechanisms for input from National Dialogue
participants into budget and farm bill deliberations at the USDA.
The National Dialogue is part of an on-going effort to link diverse
groups working to promote sustainable agriculture policy options for
the 1995 farm bill.
Sources: Letter to Richard E. Rominger, March 9, 1994; Telephone
interview with Linda Delgado, July 21, 1994.
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Anthan Sees Little or No Change Ahead
The White House and Congress will likely push for little or no
fundamental farm policy changes under the 1995 farm bill, according
to DES MOINES REGISTER columnist George Anthan.
In Congress, Anthan reports that Senate Republican leader Robert
Dole and House Speaker Thomas Foley are calling for the extension of
traditional farm programs. Administration officials, including
Agriculture Secretary Mike Espy, Deputy Secretary Richard Rominger
and Undersecretary Gene Moos, are expected to support similar
proposals.
Moos recently told more than 300 farmers and lawmakers during
the Great Plains Symposium on World Agricultural Trade that
"Overall, the new farm bill is not expected to radically change the
direction of U.S. agricultural policy."
Should White House officials change their mind and push for reforms
that reduce farm support, like the Iowa Revenue Assurance Plan
which would cut farm spending in half, farm politicians say they'll
have a hard time pushing the reforms through the Oval Office.
"Does Bill Clinton want to take $5 billion away from farmers the year
before an election?" asked a Washington commodity group
representative. "If he does, that bill will be just like Ronald Reagan's
first farm bill -- dead on arrival."
Espy is scheduled to present farm bill policy recommendations to the
Clinton administration by mid-August.
Sources: George Anthan, "Battles on Ag Policy," GANNETT NEWS
SERVICE, July 17, 1994; "Agricultural Experts Want Changes in Farm
Policy," FARM & RANCH GUIDE, July 1, 1994.
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Economists Call for New Farm Spending Focus -- Developing Markets,
Processing Subsidies
Economists at the Federal Reserve Bank of Kansas City suggest the
Clinton administration refocus farm spending toward fast-growing
markets for processed goods in order to preserve farm economies.
Alan Barkem and Mark Drabenstott, economists who made the
suggestion in a paper prepared for the bank's quarterly ECONOMIC
REVIEW, argue that current U.S. farm export programs are heavily
skewed toward the support of bulk commodities -- where, they say,
global trade is declining.
Instead, Barkem and Drabenstott say the administration should
prepare 1995 farm bill legislation with the following
recommendations in mind:
% Focus on stimulating demand in emerging markets -- such as Latin
America and Asia;
% Eliminate commodity support programs to encourage farmers to
shift production to products with higher profit margins and brighter
market prospects;
%Eliminate programs that encourage farmers to set aside acreage,
and thus lower production which puts the U.S. at a worldwide
trading disadvantage.
Source: Laurie Morse, "Economists Urge U.S. Farm Policy Overhaul,"
FINANCIAL TIMES, July 19, 1994.
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Poll: Farmers Favor Supports For Small To Medium Size Producers,
CRP
Results from a poll of more than 500 Illinois farmers indicate that a
number of producers favor eliminating income and price support
programs for large producers.
The survey, conducted earlier this year by Harold Guither, professor
of agricultural economics at the University of Illinois, found that one-
third of the respondents "would prefer to make [subsidy] payments
only to small and medium-size farms." Farmers over 50 years of
age and with gross sales under $40,000 were the strongest
supporters of this proposal, while more farmers under the age of 35
favored making federal support payments based on financial need.
Another 44 percent favor gradually eliminating federal commodity
programs altogether.
Farmers were also questioned about support for the Conservation
Reserve Program -- which begins to expire later this year. "The
most preferred policy by about one-third of the respondents would
be to extend some contracts with new bids on the most erodible
acres," said Guither. "About one-fourth would like to extend all
contracts a few years at the current rate of payment."
Source: Richard Orr, "Fearing Cutbacks in Budget, Farmers Debate
Merit, Scope of Subsidies," CHICAGO TRIBUNE, July 18, 1994.
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Researchers Contend CRP Expiration Will Steady Grain Prices
A private research institute claims commodity prices would remain
stable if 22 million acres of the Conservation Reserve Program are
allowed to permanently expire.
Scott Brown, program director of livestock and dairy for the Food and
Agriculture Policy Research Institute, says returning CRP land to
production will remove some of the price volatility associated with
short crop years and low carryover stocks.
The study estimates that as CRP acres expire, corn production would
increase to 9.483 billion bushels by the year 2002-03, from an
estimated 8.75 billion this year. On-farm corn prices would average
$2.15 to $2.45 per bushel assuming export demand grows by at least
200 million bushels.
USDA Deputy Secretary Richard Rominger said during a press
conference earlier this month that the CRP may be extended long
enough to permit Congress time to reassess the program in the
context of the 1995 farm bill. "Probably one that will get a lot of
consideration is the short-term extension of the first contracts that
expire in 1995," Rominger said.
Sources: Lester Aldrich, "End to CRP Seen Holding Grain Prices
Steady," THE NEIGHBOR, July 1, 1994; "USDA Considering Extending
CRP -- Rominger," REUTER, July 13, 1994.
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RESOURCES
1994 Policy Manual of the National Farmers Union -- Adopted by
Delegates to the National Farmers Union 92nd Anniversary
Convention, March 4-7, 1994. 90 pages. Contact the NFU Washington
office for a copy: 600 Maryland Ave., SW, Suite 202 W, Washington,
D.C. 20024. Manual provides NFU position on range of farm policy
issues and includes federal recommendations for future legislation.
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ACTION ALERT
The Congressional Sustainable Agriculture Working Group is calling
for more members. Contact your senator or representative urging
them to join the Congressional SAWG, or contact Linda Delgado for
more information on upcoming briefings -- (202) 225-2861.
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