The House version of the farm bill calls for an increase in the size of the Conservation Reserve Program to 40 million acres. It also seeks a 75 percent increase in baseline spending for other conservation programs.
And yet, despite the rising sentiment for a more conservation-oriented farm bill, it seems certain Congress will continue providing the accustomed financial support farmers have used to prop up their net income.
To those not sharing the bounty, that seems inherently unfair ... and they point to a European model as one way of addressing the disparity. Sid Sprecher explains.
Slug: Washington apple harvest.
The state of Washington produces about 75% of the nation's fresh apples, nearly half of all the apples in the U.S. But times have been tough. Growers have suffered through three straight years of below-cost returns and are currently suffering a drop in output. The market forced some 20-thousand acres of the state's orchards to be removed from production and a freak late June hailstorm caused severe damage to this year's crop.
The absence of much of a safety net for fruit growers or for that matter producers of most specialty crops is becoming an acute challenge to those regions of the country that lie outside the part of Rural America that is favored by government farm programs.
Most of the government's farm subsidies flow to the producers of eight crops, grown mostly in the Midwest or South.
Many excluded by farm programs see the next farm bill as a crucial new deal. Some, like these members of the Washington Public Policy Conference of the United Fresh Fruit and Vegetable Association, think one of the better hands to play might be the proposed Conservation Security Act – brainchild of Iowa Democrat and Senate Agriculture chair Tom Harkin.
Harkin: "I must tell your hat a lot of people that I've visited with in your industry, the growers out there who really haven't been a part of the farm bill in the past see this as a way of getting their benefits too. I believe those who raise our produce, our vegetables, our fruits, they're good stewards also. And we want them to be good stewards. So to the extent we can help promote conservation on these working lands to clean up our water, protect our soil, and our air in certain circumstances, then we ought to be promoting that. And I believe this is going to be a broadening of our farm bill to include a lot more of agriculture than we have had in the past."
The question swirling around the agriculture lobby in Washington is not whether to implement the proposal, but how to finance it. The traditional farm lobby sees it as a supplementary program. But could it be the nucleus of a new government farm policy that would enhance the rural environment and revitalize rural economies?
Proponents of the Security Act concept point to the European experience. Since 1992 European Union leaders have steadily shifted the orientation of EU farm subsidies from production to performance.
14:31:32;00 Gerard Kiely: ... about seventy-five percent of our agricultural budget now is going in the form of direct payments. We can attach conditions like farming in an environmentally sensitive way or whatever to receive these direct payments.
Gerard Kiely is Counselor of Agriculture with the EU's Washington delegation. The shift in European farm policy says Kiely has not reduced the cost of government farm subsidies. But it has encouraged farmers to employ practices that enhance the rural environment. And it has helped to maintain the population of rural Europe.
14:29:19;01 [00:34] Kiely: " European society and European government...they see farmers not just as producers of food, they see them as the guardians of the countryside. Through these policies, through the environmental aspects of our agricultural policy I believe the European countryside looks much better today than it did for example twenty years ago. And of course the other side of that is if we didn't have these policies we would get rural depopulation in many years... in particular the peripheral areas of the European union."
The EU is so committed to the approach it now pays farmers to "extensify" that is to reduce the number livestock grazed or acres cultivated.
Prodding the U.S. Congress to adopt a similar policy are trade considerations. Many trading partners, as well domestic officials contend the current system of U.S. subsidies to grain and oilseed producers distorts global trade and may be in violation of the World Trade agreement.
14:32:22;19 [00:27] Gerard Kiely: "... for example, the loan deficiency payment is encouraging in increasing production. It has removed the US farmer from market signals. This increase in production...you have to go somewhere, you can't go on the US market...is being exported and is depressing foreign market prices.
For their part the American fruit and vegetable producers want and expect more help from their government in the next farm bill. And they view the conservation security act as an attractive means of delivery, perhaps uniquely suited to the practices already employed by growers. However, they do not view the European model as a panacea. Indeed, they are critical of the hefty size of the EU's direct payments to fruit and vegetable producers. The American growers say that subsidy insulates their European counterparts from the world market in which they're forced to operate.
Kraif Naasz: " Our industry has a great many concerns about the experience Europe and the level or subsidization no matter how they term it that they provide their fruit and vegetable producers, who are outspent 20 to 1 in export promotion by our European counterparts. European apple growers as an example receive two billion dollars annually in subsidies from their government whereas the US apple growers receive zero in subsidies. Our primary objective is not to ramp up to a level that's equal to that which the European taxpayers supporting their farmer with but instead to bring the European levels of domestic support down and to eliminate the trade distorting practices that are now in place."
Given a federal budget that is becoming more limited, Congress will be pushed to reduce outlays to farm programs. And that could mean a shift from the focus that has historically favored a relative few to a structure that addresses the broader environmental and economic concerns of all of Rural America.
Naasz: "We account for twenty-eight percent of the value of American agriculture production and yet we share only a small slice of the pile when it comes to federal assistance."
Even a tiny shift in policy will be welcome by Washington State apple growers and their fruit and vegetable-growing brethren not historically given much notice by American farm policy.
For Market to Market, I'm Sid Sprecher.