COL Ag reform gets trapped in Washington gamesmanship
When congressional power brokers block reform, they often do so in a high-minded manner -- they offer to conduct a study. Such was the case over and over in the 2002 farm bill.
For example, during final farm bill negotiations House Republicans wanted to kill a Democratic Senate proposal that banned livestock ownership by meatpackers. A compromise was struck: Congress would conduct a study "to address issues affecting livestock producers, such as agribusiness consolidation, and livestock marketing issues."
To date, the promised study has yet to begin.
Another Senate-House farm bill fight centered on the Senate's goal to place concrete limits, called hard caps, on farm program payments. That tango ended when the bill's conferees agreed to a three-step compromise. First, hard caps would be placed on most types of payments. Second, one program payment scheme, employing commodity certificates, would not be capped.
And third, a newly created commission would "study and make recommendations regarding farm program payment limitations and the impact of payment limit policy changes on farm income, land values and agribusiness infrastructure."
The final leg of that stool was crucial to Senate negotiators because they, like everyone in farm country, knew that the failure to cap certificate use rendered all other caps meaningless. What they and others could not have foreseen, though, was the outright demagoguery the payment commission would expose when it hung hard numbers on how the big boys use the certificates -- tax-free in some cases -- to garner huge farm program payments and preach free markets at the same time.
The commission was composed of nine members, three appointed each by the secretary of agriculture, the House ag committee and the Senate ag committee. The appointees reflected the fault line of the original debate: the commissioners from USDA and the House wanted to retain the "soft" limits of the 2002 farm bill; the Senate appointees wanted "hard" limits.
Outgunned from the get-go, the Senate group, led by Iowa State ag economist Neil Harl, lobbied for never-before revealed USDA data about who was skirting the payment limits and how they were doing it. Next they wanted to know exactly how hard payment limits would affect land prices, farm income, crop mix, and farm size.
After getting the numbers in hand, the collegial committee (whose final report, The Application of Payment Limitations for Agriculture, can be read on-line at www.usda.gov/oce/oce/payments/payment-commission.htm) agreed that "current payment limits have little impact on payments, farm income, farmland values, rural economies or markets."
What they didn't agree on, however, was how the big boys -- and particularly agribusiness -- justified not capping the broad use of certificates to fatten their farm program payments. Indeed, in the only hint of dissent in the report the commissioners who favored uncapped certificate use constructed an extraordinary argument to defend their position.
If certificate use is capped, "affected producers" -- mostly big cotton and rice farmers today -- would "reduce production or their lands (would be) farmed by other, less efficient producers (and) the efficiency of American agriculture would decline." And, they added darkly, "This reduction in efficiency could raise prices and make U.S. agriculture less competitive in the world."
Stripped of its economic jargon, what that says is the very folks who lobbied hard for more "freedom to farm" and more "free trade" now claim they must have unfettered access to the federal treasury to protect themselves from "other, less efficient producers" so that American agriculture stays globally competitive.
That's 100 percent economic baloney. Uncapped farm subsidies do not enhance production efficiency. If they do anything, they tilt the playing field in favor of the big boys who have the scale to take advantage of them. The result is they have more staying power in unprofitable markets.
If payments were capped, however, the big boys may be forced to follow their own prescription, Freedom to Farm, and shift and maybe exit production.
They clearly understand this, thus the economic hogwash. The proof is in the politics: They always play for blood -- yours, not theirs -- to retain payment loopholes.
Alan Guebert is a syndicated columnist from Delavan, Ill.