Is the Farm Bill's Fat Finally in the Fire?
The agriculture industry is hoping for a 2007 bumper crop-of money. When Congress reconvenes in January, one of its top priorities will be hashing out a new six-year farm bill, an always anticipated Washington ritual that has regularly delivered massive subsidies to the industry and howls of protest from budget hawks and others. Supporters say the money has kept the farm economy afloat through market crashes and dire weather. But the farm bill has a reputation for being heavy on wasteful pork-barrel funding. One published report cited $1.3 billion for folks who don't farm at all. Critics say it's time to end the payouts. And environmental and trade considerations have made the bill a platform for debate on some of the nation's most crucial issues.
From fiscal years 2002 to 2006, the government spent $93.3 billion subsidizing "commodity crops" like corn, wheat, rice, and soybeans, flooding the international market with cheap goods. It may keep the American farm economy going, but the policy threatens free-trade agreements; World Trade Organization talks are stalled because of agriculture subsidies by the United States and equally protectionist European nations. Another chief complaint: Seventy-two percent of the money goes to just 10 percent of the recipients. "The big guys get bigger ... the small operators are left behind," says Ken Cook of the Environmental Working Group.
While Big Ag is pushing for another barnburner, the largess of the 2002 farm bill, penned at a time of government surplus, is gone. This time, nothing will come easy.
Dust Bowl. The farm bill's roots are in the Great Depression. But when the economy recovered, subsidies didn't stop, partly because of powerful legislators from farm states. In 1996, Indiana Sen. Dick Lugar attempted major reform with the Freedom to Farm Act, which cut subsidies to staple crops and allowed farmers more choices in planting. It passed, in part, because of a bullish commodities market. But when prices fell, the agriculture industry clamored for help. By 2002, it was back to business as usual.
But the business of agriculture, and the farm bill, are changing. Fruit and vegetable growers are demanding their slice of the pie as they face stiffening competition from imports. They have the backing of the powerful California delegation in Congress and have already submitted their own bill. But ethanol will dominate talks. Not only are corn prices booming because of ethanol demand, but the gasoline substitute could give producers a way around international trade regulations through an exception that's made for environmental purposes, such as renewable fuels. Free-traders want to kill all subsidies, and environmental groups who have the ear of some Democrats oppose more corn-based ethanol, preferring switch-grass- and wood-chip-based biofuel. They also fear that more corn production will remove land from the bill's Conservation Reserve Program, which currently keeps about 36 million acres of farmland out of production.
From all this, an odd-couple alliance is forming among Bread for the World, the libertarian Cato Institute, the liberal Environmental Defense, and the conservative Club for Growth. Expect talks to accelerate by early spring. Most insiders predict calls for reform will keep Big Ag from going home with the usual honey pot, but it won't be left hungry, either. For some, that's enough. "It's almost like a revolution is taking place," says Kathleen Rogers of Earthday Network. If that's so, change may be coming quick to rural America.
This story appears in the December 18, 2006 print edition of U.S. News & World Report.
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