Part Two of a Series
LITTLEFIELD, Texas – High Plains cotton farmers look at the steel industry, airlines, and health care providers (who receive a good portion of their incomes from government payments in the form of Medicare and Medicaid) and wonder how those industries got to the top of the heap for financial aid. They can only scratch their heads and wonder: What is government thinking?
They see the United States as the Lone Ranger holding down trade barriers, crop subsidies and, ultimately, farm incomes, all by itself, while other countries snub their collective nose at demands for equal market access while looking for loopholes to keep U.S. farm goods off their retail shelves.
They wonder why, with historically low commodity prices, high costs and a strong dollar that hampers sales of even the best quality agricultural goods overseas, the Administration and Congress doesn’t recognize their plight and provide solutions.
Farmers, ranging from concerned to highly agitated, who recently met with this Southwest Farm Press reporter at Littlefield, Texas, argue that government, the general public and the media simply don’t get it.
Jimmy Drake, a Lamb County farmer, recounted a conversation he recently had on an airplane. “A lady sitting next to me found out I was a farmer and started in on how we are over-using chemicals. The fact is, we can’t afford to overuse anything. We’re more likely to go under instead of over.”
A big part of the trouble for U.S. farmers, he says, is that “too much media writes about what they don’t know.”
Misinformation, farmers agree, plays a crucial role in how legislators react to farm policy proposals.
“Information regarding payment limitations is a good example,” says Brad Heffington. “No one seems to consider the investment farmers make.”
That payment restriction, included in the Grassley-Dorgan Amendment, sticks in the craw about as irritatingly as anything a misguided Congress has dumped on them since the Federal Agricultural Improvement and Reform (FAIR) Act of 1996.
Drake says that piece of farm legislation may not be the longest running farm law in history. “It just seems like it.”
Heffington says the payment limitation will “affect about half the farmers in the Texas South Plains. Most of the rest will come just under the limit and will not be able to expand,” he says.
That kind of limitation precludes a farmer from using the economies of scale to buy in bulk, provide volume for markets and to use technology efficiently. It also ignores the fact that a relatively small percentage of the country’s farmers produce the bulk of the food and fiber.
“Payment limitations also depend on yields,” says Larry Clawson, who farms near Whiteface, Texas.
Drake says rules that keep changing also make farm planning difficult. “We need consistency,” he says.
Banker Tim Farris says government farm policy “has been emphasizing expansion. Now they want limits.”
Drake suggests the most equitable way to look at farm payments is by acreage, not by farmer. “Subsidize the acreage, all cotton acres the same.”
What’s the big deal about subsidies anyway? “Medicare and Medicaid payments to doctors and hospitals qualify as government subsidies,” Heffington says. “What kind of payment limitations do they place on doctors? And they pay the bigger hospitals higher subsidies than they do smaller ones. Doctors and hospitals can raise prices; we can’t.”
He wonders why providers of affordable health care should be treated more generously than providers of affordable food.
Farmers also note that other countries take care of their farmers. “Most understand the value of their food supply,” Drake says. He says the Australian government gets checks to farmers within weeks following disasters.
They remain skeptical about production controls, however. “If we cut back, world production would take up the slack,” says Jerry Sowder.
“Production controls could work if we restricted imports,” Clawson says.
Imports also rankle cotton growers who have seen the textile industry shrink like a cheap shirt under the onslaught of foreign goods. “As our mills close it appears that the country is becoming a nation of consumption instead of production,” Karen Clawson says.
A sizeable contributor to the textile trade imbalance, according to Farris, is the strong dollar, which makes foreign goods cheaper than U.S. grown.
“Between the currency rate and a tariff that’s 11 percent compared to 50 percent for most of our trading partners, we have to be the cheapest producer in the world to get into markets, even with high quality lint that’s competing with junk.”
“With our domestic surplus, why are we importing cotton?” Karen asks.
Farmers charge that the World Trade Organization (WTO) is of less than no help. “It’s unfair,” Heffington argues. “The dollar is so high it’s hard to compete as a seller,” Farris adds.
Heffington would like to ask members of the U.S. Congress how much help lowering tariffs has been to the economy.
Farmer Randall Gray takes issue with changes in crop insurance. “We’re now entitled to payments that are 10 cents a pound lower than last year,” he says. “That’s below loan price.”
Drake points to another uncomfortable wrinkle in the flawed fabric of crop insurance. If drought hits cotton early and it doesn’t make a stand, farmers have to wait 30 days past the established planting deadline before the crop is released for insurance. “We’ll be into the first of July by then,” Drake explains, “too late to plant a second crop and insure it.”
“The government has pushed us to use crop insurance as our main safety net and then they poke holes in it,” Jerry Clawson says. “We should be allowed to plant a second crop in a timely manner.” He says too much of the money farmers spend on insurance premiums goes to administration instead of back to farmers who need it.
Of all the complaints farmers have about farm legislation, the most critical for the moment is timing. They needed farm legislation in place last fall, as they made preliminary plans for the 2002 crop.
“They’re planting cotton in the Lower Rio Grande Valley and have no clue what the next farm bill will provide,” says Drake. “We may not have a clue when we plant in the South Plains. It’s hard to figure crop potential without a program in place.”
It’s hard on bankers too, says Farris. “In the past few years we have relied more and more on government programs that help guarantee payments,” he says. “This year, we have to work up loans not knowing what will happen with legislation. We just have to hope things get better.”
Farris says the best economic stimulus package Congress can enact for rural America is a good farm program.
“If we get a good bill, we can begin to recover what we lost the last few years,” Heffington says.