Robert Pore's Ag Blog

Is there a better way to run farm programs where non-farmers aren’t getting huge government farm payments not grow something that they weren’t growing in the first place?

Of course there is, said Larry Mitchell, chief executive of the American Corn Growers Association.

“We need a farm program that provides a price support to farm families rather than subsidies, an adequate strategic reserve of storable food and feed commodities and a way to curb overproduction of crops now in surplus so that we can plant new energy producing crops to help the nation mover toward energy independence,” Mitchell said.
Mitchell comments come in light of a recent article in the Washington Post revealing problems in America’s farm subsidy program.

What the Washington Post showed isn’t a new revelation. Any time Congress brings up reforming America’s farm program payments, such as payment limitations or better programs targeting those benefits to small and medium sized independent family farmers and ranchers that need the help, it’s shot down by critics warning how such programs would detrimentally harm the fabric of U.S. agriculture.
And those critics are probably right because government farm programs have helped concentrate the majority of farm production in the hands of fewer and fewer producers.


Mitchell said this organization will not defend attacks on the current farm program because they know there is a better way.

During the debate on the 1996 Freedom to Farm Act, Mitchell said there were very few amendments allowed by the Senate and no amendments were allowed in the House of Representatives.

One of those Senate amendments, he said, was introduced by Sen. Byron Dorgan, D-N.D., and 11 other farm state Democrats, which would have required the land to be planted in order to get the Agricultural Marketing Transition Act (AMTA) payments, also known as Production Flexibility Contract (PFC) payments.
Mitchell said these payments were later renamed Fixed Payments in the 2002 farm bill.

“The Republican lead Senate defeated the measure in a 48 to 48 tie vote with the aid of well financed agribusiness lobbyist using a well-known falsehood that the amendment would adversely impact those farmers who used summer fallow as a crop rotation in the driest areas, “ he said.

According to Mitchell, the claim was far from true.

He said the AMTA payments and later the Fixed Payments were a result of the U.S. agreement to the Uruguay Round of GATT (which also established the WTO) and a move to "decouple" farm subsidies from production in an ill advised attempt to reduce over production by removing the incentive.

“The fact of the matter is that farmers will produce on every acre every regardless of subsidies until they go broke and someone else takes over the land,’ Mitchell said. “But the policy makers at the time were convinced that decoupling was the road to supply management and curbing overproduction, even though they also do not publicly believe in supply management.”

According to Mitchell, one of the bigger points in the Post story is that fixed payments drive up cash rental rates.

He said there are some in production agriculture who take a lot of heat for defending the Conservation Reserve Program (CRP) against those who justifiably find that the program hurts young and beginning farmers by holding some of our most environmentally fragile farmland in reserve until such time as we need it for production.

“I feel that the fixed payments are much more detrimental to young and beginning farmers in that these payments have been amortized into the price of land and land rent,” Mitchell said.

He said that by replacing fixed payments with a decent price support program, the government could direct the benefits toward the actual farmer. It would also save billions every year in taxpayer subsidies and force those who benefit the most under the current farm program (the large integrated livestock companies and the food processors) to pay their fair share for their raw commodities.

“In addition, with the expansion of biofuels and more utilization of surplus crop production, we should see crop prices increase and subsidy payments decrease, except that Fixed Payments will not decrease regardless of crop prices,” Mitchell said.
The American Corn Growers Association is urging those interested in global food production, global family agriculture, and developing countries to read the groundbreaking research report Rethinking U.S. Agriculture Policy: Changing Course to Secure Farmer Livelihoods Worldwide, by the Agriculture Policy Analysis Center (APAC), part of the University of Tennessee.

“This report goes comprehensively to the heart of the ever more contentious trade issues of farm subsidies in developed countries, low world commodity prices, and global poverty,” he said.

For more information, visit: www.acga.org.