A year ago, an extension of the 2002 farm bill was the best agricultural commodity organizations could have hoped for as debate on the 2007 farm bill began. Today, the 2002 farm bill is “the foundation on which we can build, it is no longer a ceiling,” said U.S. House Agriculture Committee Chairman Larry Combest, R-Texas, speaking at the USA Rice Outlook Conference in Las Vegas.
The reason the debate has flipped, according to Combest, is primarily due to higher commodity prices driven by the strong demand for renewable fuels, which has cut the cost of farm policy.
“Those who have long criticized the 2002 farm bill contending it costs too much must now lament the irony that simple extension of current farm bill policy is in fact the lowest cost option.”
Combest noted that projected higher commodity prices and lower farm payments in the future would not only keep farm policy costs down, but would keep it WTO compliant. “As a result, any change in policy would have to fit within a small, low budget baseline for the farm bill. Making such a change is very difficult, if not impossible.
“The 2002 farm bill that critics deplore so much has already saved an estimated $17 billion and is expected to rack up even more savings next year and beyond if current policy is maintained,” Combest said. “Compare this to just earlier this year when some predicted that the 2002 farm bill would somehow spend so much in 2006 and 2007 that it would wipe out any previous savings.
“So when we hear talk from right wing think tanks about the need for small government and low spending, we should ask them why they're not supporting a bill that accomplishes both.”
Combest also cast doubt about the renewal of Trade Promotion Authority and of a WTO agreement, adding that current farm policy is the most WTO compliant. “It will be a very tough sell for foreign competitors to argue (in a WTO case) that farm payments which are low, or not even being paid out in some cases, can somehow cause them serious prejudice,” he said.
“As for commodities with low prices where some level of payments may be made, there remains some exposure. But what litigants and the WTO need to appreciate is that the mindset of leadership in Congress is that they are not likely to dismantle or injure yet one more domestic industry and the jobs it provides to American workers. Trade is wonderful thing. We're glad we participate in it, but it's only helpful if in fact, you're making money.”
Combest noted that the additional legal action on Brazil's WTO case against the U.S. cotton program regarding U.S. compliance efforts may come soon. “Whatever happens, the WTO response will be scrutinized here at home. If any accommodations to the WTO ruling are made, they would be made within the context of the 2007 farm bill and in ways which would cause minimal disruption to the affected producers.”
Combest, who chaired the House Intelligence Committee, called on the administration and Congress to heed the advice of former CIA Director James Woolsey who has stressed the need to aggressively pursue domestically produced renewable fuels rather than rely on Mid East oil, the proceeds of which can be used to fund terrorism.
Combest urged environmentalists to invest in research “that would make it feasible and economical to expand the universe of commodities that can participate in making our country energy independent - if they really want to be a constructive force for protecting the environment, as opposed to stirring emotions and raising money to keep them in business.
“Crop diversification and renewable, clean-burning fuels are both served if they do that. Let's hope they get serious about conservation and protecting the environment rather than raising eyebrows and money.
Congress can help too, according to Combest. “My hope is that the administration and Congress will see that they can more positively reduce the cost of farm policy — which has already been a bargain — by increasing investment in an energy title or an energy bill than by making cuts to the farm bill that would hurt our economy, reduce our competitiveness in the world, and cost us good paying American jobs.”
Combest, who earned a 95 percent conservative rating when he served in Congress, said the passage of the 2002 farm bill, was good farm policy and good fiscal policy and was the thing to do.
“The inclination of most members of Congress is to say that we have a policy in place that has a strong safety net that America that is working, and it can be maintained at a much lower cost than anyone ever expected and it can do as good a job as any alternative in terms of minimizing WTO litigation risks. It's hard to argue with that.”