For much of the past 50 years, the government tried to support farm gate prices by controlling supply. The result was farmers produced primarily for the government, not for the market.
The so-called Freedom to Farm Act was intended to have changed that. Under the 1996 law, farmers could grow anything and would be given transition payments to help them adjust to the market ... provided they didn't grow fruits and vegetables on their historic base acres. But the result was, more or less, the same ... farmers produced for the government as the markets tanked. And the transition payments became handy conduits for billions in bailout payments to farmers of a few crops. Therein lies the sore point that could well define the next farm bill debate.
A preview of the coming farm bill debate may well have been the farm relief package passed by congress on the eve of its august recess.
The house agriculture committee and the full members endorsed a 5.5 billion-dollar package that targeted relief mostly to producers of the traditional crops. The relief vehicle was the so-called AMPTE or agricultural market transition payments that were created by the 1996 farm bill. During the seven-year run of the law farmers were to receive the payments to help them make the transition to a market economy. But with a succession of miserable market years, the payments for all intents and purposes have, say critics, simply become part of an expensive dole that is in fact provoking more discomfort than defense from its recipients.
The relief measure was similar in the Senate, save for an additional 2 billion dollars provide financial relief to producers here to now largely ignored by the farm bill.
For example the nation's beleaguered apple growers would have received more 150 million dollars to help them through one of the toughest markets in fifty years. But a presidential veto threat of the larger senate measure ended debate. The senate caved and passed the House version. And apple and specialty crop producers were shunted aside by the traditional farm lobby.