Farm Reform, at Last?
THIS was to be the year that the subsidy structure underlying much of American agriculture was to be drastically altered, if not demolished.
That hasn't happened, as yet. The political alliances that bolster price supports for cotton, sugar, peanuts, and other commodities are entrenched. In the last few weeks, they have proven still capable of thwarting powerful, reform-minded legislators like Rep. Pat Roberts (R) of Kansas and Sen. Richard Lugar (R) of Indiana.
Those two gentlemen, chairs of their respective Agriculture Committees, have pledged an overhaul of the farm subsidy system. Mr. Lugar is on record favoring deep reductions in current price supports and set-asides. But opposition from Southern farm-state colleagues sidetracked those radical notions.
Mr. Roberts has bannered his "Freedom to Farm Act" as unshackling farmers to act more as the independent businesspeople most envision themselves. His bill is now part of the House budget reconciliation package.
Both chairmen are from farm states, with strong agricultural constituencies. And both are deficit hawks, determined to pass legislation that would cut the $13 billion or so demanded by the Republican budget plan. From the start of 1995, the farm bill has been held up as a crucial test of the GOP commitment to meet the seven-year, balanced-budget target.
What Lugar and Roberts hoped for may still be achieved, but a lot depends on which interests prevail during the conference process, when House and Senate differences are worked out. The more of Roberts' plan that survives, the better.
Pro-subsidy forces argue that government supports are needed to "level the playing field" for US farmers who compete with subsidized producers abroad. But a greater need is the leeway to respond to shifting markets and grow more grain, say, or shift into different crops as demand requires, which subsidies discourage.
A recent study sponsored by the American Farmland Trust indicated that farmers with greater flexibility as to crop choice and size will do better in the international market, not worse.
World markets are rapidly expanding, and American farmers shouldn't remain tethered to familiar subsidies. Cuts in agriculture spending are inevitable, and if major crops are excluded from subsidy reductions, the budget ax will swing toward cutting funds for nutrition and land conservation, areas short on clout but long on national importance.
Studies have indicated that a move away from subsidies will boost competitive-ness.