Fickle Weather and Low Harvests May Alter US Aid to Corn Farmers
AS corn growers plant their crops this spring, many will cast a cautious eye to the sky and ask, ``What next?''
A searing drought in 1988 and last year's once-in-a-century flood resulted in two of the puniest crops since the Great Depression. Sandwiched between them in 1992 was the largest harvest in United States history.
This spate of freakish weather has prompted farmers across the corn belt to pay unusually close attention to the barometric pressure. This summer, however, they won't be alone.
With Congress set to review US farm policy in 1995, analysts across the nation say this year's crop results could fundamentally change the way corn - the nation's largest crop in bushels - is produced and paid for.
``There's a lot riding on the weather this year,'' says Susan Keith, spokeswoman for the National Corn Growers Association in Washington. ``If we have another weather problem, we could see markets that we cannot supply. We may actually have to import corn. That might have a significant impact on policy.''
A new report by the US Department of Agriculture projects a medium-sized harvest of 1.46 billion bushels this year, but also predicts an increase in demand overseas. As a result, says USDA chief economist Keith Collins, the US corn supply by planting time in 1995 will be less than 1.3 billion bushels, far below average.
``The consumer is in jeopardy if there is another short crop this year,'' he says.
In light of low on-hand reserves and an expected increase in exports, another low-yield crop might prompt lawmakers to do away with the Acreage Reduction Program (ARP) - a policy requiring farmers to set aside up to 10 percent of their cropland in order to qualify for subsidies.
Although US Secretary of Agriculture Mike Espy did not mandate any set-asides this year due to last season's flood-ravaged crop, he may soon lose the authority altogether.
Sen. Richard Lugar (R) of Indiana, a longtime advocate of a more market-oriented policy, objects to set-asides on the grounds that they make American farmers less competitive globally. Senator Lugar contends that set-asides signal to farmers in other countries that if they grow more, they can enter markets that American farmers may be unable to service.
``If we aren't supplying these markets,'' Ms. Keith says, ``somebody else is.''
Proponents of the set-aside program, led by Sen. Bob Kerrey (D) of Nebraska, argue that ARP protects against oversupplies and saves the government millions of dollars in farm subsidies by keeping crop prices high. According to a Senate Agriculture Committee aide, a one-cent decline in the market price of a bushel of corn costs the federal government $50 million in subsidy payouts.
In addition to favoring set-asides, Senator Kerrey says he would also implement a reserve policy that would maintain a certain amount of grain on hand in government warehouses that could be used to stabilize prices.
``Without [a reserve policy], all discussion about set-asides almost becomes irrelevant,'' Kerrey says. ``No matter what the set-aside is, unless you have a reserve policy, it won't work.''
Senator Lugar contends that a reserve policy would be ineffectual because it could be easily counteracted by privately held corn reserves.
Like all agricultural debates these days, the ARP issue also raises environmental concerns.
Dennis Keeney, director of the Leopold Center for Sustainable Agriculture in Ames, Iowa, says that in addition to being one of the most erosive crops, corn is also among the hungriest for chemical pesticides, herbicides, and fertilizers.
Although American farmers are ``learning to farm more sustainably,'' Mr. Keeney says, abolishing set-asides means more potential damage to the land.
``Government policies are geared toward multinational events rather than concern for the farmer and the land,'' he says, adding that set-asides allow farmers to plant idle fields in grasses and covering crops that protect and nourish the soil.
Keeney notes that set-asides are bolstered by the Conservation Reserve Program, which pays farmers to idle environmentally sensitive lands for up to 10 years.