- NFU Fly-in Focuses on Farm Bill
-Conrad to Submit 10-Year CRP Legislation
-CRP Benefits Weighed, Argued, Analyzed
-Cotton Industry Worries Program Benefits May Get Cut
-EPA Believes Clean Water Act Can Get Rolled in to Farm Bill
-Economist Says Repeal of Farm Programs Would Be Disasterous
-New Corn Growers' CEO Says Farm Groups Will Unite Over Farm
-Arguments for Export-Oriented Farm Bill
-Commodity Exchanges Push for Options Pilot Program Alternative to
Price Support Programs
-Espy Says Reog Won't Affect Farm Programs
-AG Week Calls for "Info Highway" Plan
NFU Fly-In Focuses on Farm Bill
The National Farmers Union (NFU) conducted its annual fly-in this
week to give more than 250 farmers and ranchers a chance to meet
with lawmakers in Washington, D.C. to discuss, among other issues,
the 1995 farm bill.
Conversations centered on this year's devastatingly low commodity
prices and concern over growing concentration in contract livestock
production. NFU, along with other major farm organization members,
called on Agriculture SecretaryMike Espy to raise commodity loan
rates to at least 100 percent of the five-year average price. They
said raising loan rates will not only stimulate market prices and
boost farm income, but will also lead to a decrease in the deficit.
Fly-in participants also discussed health care, crop insurance reform
and federal reorganization with lawmakers, according to NFU
Secretary Dave Carter.
Sources: "Farm Groups Urge Farmers to Store '94 Crop and Use
Marketing Tools," NFU NEWS RELEASE, September 20, 1994; "Local
Resident to Join Two Hundred Farmers and Ranchers in Washington,
D.C. on Sept. 18," Kansas Farmers Union NEWS RELEASE, September
13, 1994; NFU radio release, September 20, 1994.
Conrad to Submit 10-Year CRP Legislation
Senator Kent Conrad (D-North Dakota) said that he will introduce
legislation as early as this week to extend the Conservation Reserve
Program for another 10 years. Senator Tom Daschle (D-South
Dakota) will reportedly co-sponsor the legislation aimed at
preserving highly erodible land under the 1995 farm bill.
The Conrad-Daschle bill would complement H.R. 4416, a House bill
earlier introduced by U.S. Representatives Collin Peterson (D-
Minnesota) and Pat Roberts (R-Kansas).
Source: Dennis Anderson, "New Legislation Would Extend CRP
Program," STAR & TRIBUNE, September 14, 1994.
CRP Benefits Weighed, Argued, Analyzed
As Congress and the USDA prepare to debate the Conservation
Reserve Program, federal and private researchers, policy specialists
and concerned farm and environmental groups are offering, almost
weekly, their analysis of the program.
The USDA's Economic Research Service, for example, warns that the
economic consequences of non-renewal of the CRP program will be
"increased farm output, lower prices for some commodities, slightly
lower government payments, and a small decline in farm income."
Conversely, the National Grain and Feed Association claims that by
returning CRP acres to production, total crop production would rise,
domestic consumption would increase, exports would grow, and net
farm income would jump by $4 billion.
Willis Peterson, a professor at the University of Minnesota
Department of Agriculture and Applied Economics, argues in favor of
CRP expiration. Peterson says that under CRP, there has been less
economic activity in rural communities as the result of less planted
acres, less demand for farm inputs and less wholesale and
The Campaign for Sustainable Agriculture, a network of
nongovernmental groups representing a range of constituencies,
supports renewal the program for highly erodible land, and
encourages redirection of the CRP toward long term easements for
partial field enrollments with "exceptionally high environmental
payoff, such as grass buffer strips along water ways, sinkholes, and
contour grass strips for erosion control."
Contracts on over 36 million highly erodible acres will completely
expire by 2003 if not renewed under this year's farm bill.
Sources: "CRP Hurts Rural Economies," AGWEEK, September 12, 1994;
"Gauging Economic Impacts as CRP Contracts Expire," AGRICULTURAL
OUTLOOK, September, 1994; "Return Non-Fragile Areas to
Production," MILLING & BAKING NEWS, September 6, 1994; Chuck
Hassebrook, "CRP Should Be Converted to Permanent Resource
Conservation Program," THE NEIGHBOR, September 9, 1994;
Telephone interview with Amy Little, Campaign for Sustainable
Agriculture, September 16, 1994.
Cotton Industry Worries Program Benefits May Get Cut
The National Cotton Council of America, a Memphis-based lobby
group representing thousands of raw cotton producers, merchants,
manufacturers and oilseed millers, plans to revive a political action
committee to work to preserve provisions of the federal
government's cotton program.
At stake for the cotton industry is a law governing $50 million worth
of annual federal payments to the cotton industry for income
support, research, insect management and market development
programs. The law is up for revision in 1995.
William T. Lovelady, NCCA vice chairperson of a cotton producer
steering committee, said he doubts that an extension of the current
farm bill's commodity provisions by Congress would be possible
because of the Uruguay Round of GATT rules and budget provisions.
Source: Charles Conner, "Council to Revive PAC for Cotton Protection,"
COMMERCIAL APPEAL, September 14, 1994.
EPA Believes Clean Water Act Can Get Rolled in to Farm Bill
The Environmental Protection Agency (EPA) staff are "exceedingly
disappointed" that Congress may not pass a Clean Water Act rewrite
this year, but believe that some of the bills' provisions can be
addressed through the 1995 farm law.
The pending reauthorization bills (H.R. 3945, S. 2093) support EPA
efforts to shift policy toward a watershed-approach to pollution
problems and to combat polluted runoff, said Tudor Davies, an EPA
Source: "Water Pollution: EPA Official Expresses Disappointment Over
Lack of Action on CWA Rewrite in 1994," BUREAU OF NATIONAL
AFFAIRS ENVIRONMENT DAILY, September 16, 1994.
Economist Says Repeal of Farm Programs Would Be Disastrous
Barry Flinchbaugh, a Kansas State University economist, warns the
consequences of repealing farm programs, as argued for in a recent
THUMB FARM NEWS editorial, would be disastrous. "If American
farmers woke up in 1995 to discover no farm programs,"
Flinchbaugh reckons, "U.S. farmland values would fall $100 billion
overnight." In addition, he says we could expect: "Fencerow-to-
fencerow production; limit-down moves in the grain market;
livestock producers would use cheap feed to expand meat production
until the bottom drops out of sight. In short, severe variability, and
near-term total chaos."
Bob Linck of THUMB FARM NEWS, argues that farmers "would be
better off if Congress would simply repeal USDA's whole farm
program package." Linck says most farm programs cost taxpayers
money and do little to help farmers. "Real help, in current dollar
value, for good soil, water and forest conservation practices on farms
has been all but eliminated. The price support programs are now
designed to subsidize the biggest buyers, traders and exporters,"
Sources: Alan Guebert, "Ag Would Be Smashed Without 1995 Farm
Bill," THE NEIGHBOR, September 9, 1994; Bob Linck, "The Best Farm
Bill Would Be 'REPEAL'," THUMB FARM NEWS, August 24, 1994.
New Corn Growers' CEO Says Farm Groups Will Unite Over Farm
Christine Wehrman, who will become the new National Corn Growers
Association CEO October 1, echoed a recent call by ADM's leader
saying agriculture interests will need to cooperate more than ever as
the 1995 farm bill debate heats up. "We're starting a new era,"
Wehrman said. "We need to reach out not only to other farm groups
but to other interests such as environmentalists ... the coalition effort
will be very important."
Source: M. McNeil, "Corn Growers' 1st Woman CEO Reaches Out in New
Era," REUTER, September 6, 1994.
Arguments for Export-Oriented Farm Bill
Government and private analysts say next year's farm bill must be
aimed at creating more flexible policies that enhance the United
States' ability to compete in the international food market.
This translates into a call for reduced farm income supports. Farm
subsidies which boost commodity prices "simply wed U.S. farmers to
the slowest growing segment of the world market -- bulk
commodities -- while driving up the costs of commodity inputs and
hindering the industry's competitiveness in the fastest-growing
segment of the world market -- consumer foods," argue Alan
Barkema and Mark Drabenstott, economists at the Kansas City
Federal Reserve Bank. "To fully exploit the market opportunities
ahead, U.S. agriculture policy needs to be re-evaluated."
The USDA's Jerry Sharples said recently that political and economic
changes in China, Europe, the former Soviet Union and Latin America
will have a profound impact on world food trade. He noted, China in
particular, could become an enormous market for high-value
consumer products, as well as for grains and livestock.
The USDA is reportedly considering language for the farm bill that
establishes a Pacific Rim-oriented commodity export policy.
Sources: George Anthan, "Farm Policy Pointed Wrong Way?"
GANNETT NEWS SERVICE, September 11, 1994; "USDA Seeks Export
Aid," KNIGHT-RIDDER, September 9, 1994.
Commodity Exchanges Push for Options Pilot Program Alternative to
Price Support Programs
Heads of the nation's three commodity exchanges are pushing for
expansion of the Agricultural Options Pilot Program (OPP) as an
alternative to income support programs.
The OPP was authorized in the 1990 farm bill for corn, wheat and
soybean crops, though $3 million worth of funding for the program
was not allocated until 1993. The objective of the OPP, according to
the Chicago Board of Trade, is to determine whether Exchange-traded
commodity options can be used effectively by producers for price
and income support. OPP participants are offered incentive
payments equal to five cents per bushel to participate in the
program, but are not eligible for deficiency payments.
Exchange heads, who solicited Agriculture Secretary Mike Espy
earlier this summer to meet to discuss the future of the program, say
the following reforms are needed to make OPP a successful
alternative to income supports:
%earlier announcement of program details to give producers more
time to plan marketing strategies;
%expansion of the program to include additional corn, wheat and
soybean counties; and
%increasing the maximum number of bushels of wheat and corn
eligible to be enrolled in the OPP to 150 million bushels from 60
"We strongly believe that an improved OPP for the 1995 crop year
will provide further evidence that exchange traded options are a
viable alternative to government support programs," wrote heads of
the Chicago Board of Trade, the Kansas City Board of Trade and the
Minneapolis Grain Exchange in a July letter to Espy.
The number of producers participating in the OPP increased 62
percent last year, from 1,047 to 1,697 this year.
Sources: Letter to Secretary Espy, July 19, 1994;"A Report on USDA's
Ag Options Pilot Program," CBOT, KCBT, MGE, September 15, 1994.
Espy Says Reorg Won't Affect Farm Programs
Agriculture Secretary Mike Espy assured South Dakotans during a
recent luncheon that federal plans to reorganize and consolidate the
USDA would not affect the substance of farm programs. "I'm trying
to downsize, streamline. You won't feel it in the programs. You
might have to drive an extra mile or two, but the office will be more
efficient when you get there," Espy promised.
The Agriculture Department is scheduled to close 1,200 under-used
field offices, providing current unrelated stalls in Congress can be
worked out to make way for reorganization approval.
Sources: Julia Malone, "Reinventing Agricultue: A Progress Report,"
AGWEEK, September 5, 1994; Mark Haugen, "Espy Says He's Ready
for Farm Bill Fight," THE NEIGHBOR, September 9, 1994.
AG WEEK Calls for "Info Highway" Plan
AG WEEK editors challenged Congress to pursue an "integrated
information management" provision in the 1995 farm bill to hook
farmers up to Internet, or the information highway. "The power of
information already is in the hands of those who make profits at the
expense of producers. It's time producers got a good ride on the
information highway, too," AG WEEK concludes.
The editors note that already existing data facilities in the land-
grant and federal system could be used to monitor and diseminate
market information to rural areas. "Such a system could be
coordinated much like the Defense Department's central command
collects and analyses its early warning and other information-
gathering services," wrote AG WEEK.
Source: "Entrance to Information Highway," AGWEEK, September 19,
Produced by Gigi DiGiacomo, The Institute for Agriculture and Trade
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