Texas commodity associations may have some differences in what adjustments, if any, they want in the Farm Security and Rural Investment Act of 2002 but they agree that maintaining a unified front when talks begin in earnest will be crucial to hanging onto the program they have or at least using it as a base for one they hope to be nearly as good.
Discussions at a recent Texas Ag Forum in San Antonio underscored the challenges agriculture faces as Congress begins the process of crafting legislation for a new farm program for 2007.
The hurdles include budget deficits, trade agreements and an administration that seems intent on paring back agriculture spending.
Vernie Hubert, Senate committee on Agriculture, Nutrition and Forestry, said extending the 2002 law might be possible. Several bills have been presented in both houses of Congress and legislators may see hanging onto that program as a stopgap measure while the DOHA Round of trade talks continues.
Hubert said those who “worship at the altar of free trade” would like to see farm legislation geared toward trade agreements and open markets. “There's always a kernel of truth in each point of view” in trade issues, he said. “But we have to sit down and examine each kernel.”
He said some legislators support “leading by example, conforming to a program based on what they expect from WTO talks.” Oxfam, no fan of U.S. farm programs, with consistent criticism that the cotton program hurts less developed countries, he said, also pushes that theory.
Leading by example comes with peril. “The European Union already outspends the Untied States by a significant margin (on farm subsidies),” Hubert said. “And Congress made every effort to make programs compliant (with WTO agreements) in the 2002 law.”
He said Congress will approve “no unilateral disarmament” in trade talks. “We have to be careful. Cutting farm programs (to critics' recommendations) could mean a 30 percent decrease in farmland values, especially in the Midwest. We can't afford that kind of disruption.”
He said the current budget deficit also poses problems. “We don't like deficits. But agriculture has been willing to participate in deficit reduction. We only ask for fair treatment.”
He said the 2007 farm bill debate likely would coincide with another budget reconciliation. “That makes agriculture vulnerable.”
Payment limits will reoccur like a bad dream. He said payment amounts as well as eligibility could be cut. “These changes could dramatically affect the operation of a farm. For instance, non-recourse loans rely on commodity certificates. If those are limited, loans could become recourse loans. And legislators don't need to eliminate a program to achieve cuts; they just need to change it.”
He said criticism over disaster relief for agriculture is “disconcerting.”
Differing interests of various agricultural commodity groups also create potential friction points for farm bill debate. Fruit and vegetable associations, for instance, want a place at the table. And wheat produces have not seen significant benefit from the market loan program. “They want something more responsive to wheat pricing,” Hubert said. “And no one expects ag to get any more money.”
He aid ag interests must stand together to achieve their goals. “And we must have bipartisan support for a farm bill. We usually have that.”
But the “dynamic tension between the Executive and Legislative branches” does not bode well for easy passage of a farm bill resembling the 2002 law. Legislative wants a safety net, he said. The Executive looks at the WTO, political interests and budget pressures.
“The challenge is to meld various interests into something we all can support,” he said.