Bergland plea: retarget help to US farms
Current US farm policies "encourage economic cannibalism within agriculture" and have led to "short-sighted exploitation of agricultural resources with no thought for their use over the longer term."
This sharp criticism doesn't come from angry outsiders. It comes directly from the man who has been in charge of the US Department of Agriculture (USDA) for the past four years, Bob Bergland.
Mr. Bergland's detained critique of US farm policy arrived on the eve of the Reagan inauguration in a 209-page USDA study called "A Time to Choose: Summary Report on the Structure of Agriculture."
The report, which cost $1.1 million, is labeled, "preliminary." Yet few in the USDA or outside expect any Republican follow-up.
Bergland set out two years ago to investigate, as he said, "our food and agricultural system, including what economists call 'structure' -- how the system is organized, who controls it, and where it is heading." His plan was to use the report as the basis for a 1981 farm bill that would be very different from the Food and Agriculture Act of 1977. The agriculture secretary and his staff felt that time pressures and bureaucratic momentum forced the incoming Carter administration to enact a 1977 farm bill that largely copied precious legislation.
The structure report concludes that current US farm policies collectively encourage large farms to grow larger. It identifies the key beneficiaries of government programs as large farms with gross annual sales of more than $200,000 . This category -- consisting of 64,000 farms, or 2.4 percent of the nation's 2 .7 million farms -- accounts for 39.4 percent of annual farm sales. Thus this category collects the bulk of government support money, which generally is pegged to bushels or gallons of production.
This same mix of current government commodity programs, tax laws, credit availability, regulations, research priorities, and marketing systems is seen as working to the disadvantage of the 898,000 small farms and 524,000 medium-sized farms with $5,000 to $200,000 in gross sales and 58.6 percent of total farms sales.
The ultimate losers from overexpansion of large frams and neglect of medium and small farms are not only farmers, says the report. Taxpayers are hit by unnecessarily costly federal support programs and consumers are hit by higher food prices. So government support should focus on the middle-range farms, the report argues, rather than on either the large farms or the 1.2 million "rural farm residences" which produce only 2 percent of farm sales and rely mainly on off-farm income.
The report includes detailed figures on the most efficient size and sales for farms in different areas. The ideals range from a 1,500-acre Kansas wheat farm with $100,000 in annual sales to a 1,000-acre Texas cotton operation with $175, 000 in sales.
Citing average sales of $23 million per farm for the nation's 370 largest farms, the report notes that "we have passed the point where any net gain to society can be claimed from policies that encourage large farms to become larger." It warns that "unless present policies and programs are changed so that they counter, instead of reinforce and accelerate the trends toward ever-larger farming operations, the result will be a few large farms controlling food production in only a few years."
Drawing on nationwide USDA research, the report estimates that "by the time gross sales reach the neighborhood of $130,000, the technical economies have been fully obtained and most availabe market economies have probably been achieved as well."
It concludes: "In general, we must systematically remove from our polices those incentives which encourage and even reward the acquisition and holding of farmland in quantities beyond that necessary for an efficient-sized production unit."
The report also warms that the threat of monopolistic control hangs over the entire agricultural claim, from production and processing to distribution and marketing.
Former Agriculture Secretary Bergland farms 600 acres in Minnesota. But the man who now will make the decision to implementing the report's controversial recommendations is new Secretary of Agriculture John Block. Mr. Block is very proud of having turned his parents' 300-acre farm in Illinois into 3,000 acres, more than four times the "efficient farm size" recommended for that state in the structure report.
Gene Moos, senior staff analyst for the House Agriculture Committee and a former Washington state wheat farmer, agrees that government policy favors large farms. He explains that the idea of supporting the small family farmer "has great romantic appeal" for congressmen. But he feels it's unlikely that the new administration or Congress will change policies in favor of smaller farmers.
"To provide more support for smaller farmers could only result in higher prices to consumers for both food and fiber," he said, "and I'm not sure there will be support for public policies causing that."
Senate Agriculture Committee member Roger Jepsen (R) of Iowa says the report "makes it clear that government tinkering with the free marketplace is unhealthy for agriculture." Senator Jepsen pledges new support for family farmers, but he feels the support must come from removing government interference, not from simply shifting the focus of government programs.