Budget Good For Corporate, Not Rural AmericaThe latest edition of the Agribusiness Examiner featured this commentary from George Naylor, President of the National Family Farm Coalition:
COMMENTARY: BUSH BUDGET BENEFITS CORPORATE AMERICA --- NOT RURAL AMERICA
The proposed Bush budget cuts for FY 2006 will hurt family farmers, but give little relief to taxpayers while delivering low priced farm commodities to the corporate livestock industry --- Tyson, Smithfield and Cargill.
Because the 2002 farm bill doesn’t do what a farm bill is supposed to do—support market prices and avoid wasteful overproduction --- farmers have become dependent on government subsidy payments which are getting the ax in this 2006 budget. As it is, most farmers are barely surviving at current subsidy levels.
The new budget proposals and the legislation that would accompany them actually re-open the 2002 farm bill, and the authors of that bill --- corporate agribusiness --- remain the winners at the expense of family farmers and taxpayers. Secretary Johanns’ calculations show that increased spending from FY 2004 to FY 2005 --- over $10 billion for commodity program payments --- are a direct result of farm prices dropping once again below marketing loan rates.
If farm programs supported farm prices at levels that farmers received in FY 2004 due to crop shortfalls, taxpayer savings would be at least that $10 billion rather than the relatively small savings of $587 million attributed to the 2006 payment reforms.
Secretary Johann’s projected 2006 savings of $5 billion is "in part due to projected commodity price recovery" which no one can predict. The opposite could also happen since there is no floor under farm prices and crop expansion is common in many countries of the world.
The proposal to limit government payments to $250,000 per year may affect some large cotton and rice producers, but will have little effect on who produces other commodities. If cotton and rice producers shift production to corn, soybeans, or wheat, this will increase overproduction of those crops and further depress the farm price.
The 2006 budget provides no new funding for farm ownership loans in effect barring a new generation of farmers. It also dismantles important rural development programs, slashing their funding and moving the programs to the Department of Commerce; which will add confusion to both the program delivery and the mission of these programs.
Free trade agreements --- especially the WTO --- are the source of payment reforms that will most likely hurt farm income. The goal to decouple payments by limiting marketing loan benefits to historical production (on 85% of historical acreage) follows WTO edicts. The five percent cut in direct payments and countercyclical payments may seem small but in fact account for $3.6 billion of the projected savings. These are real cuts on top of record low commodity prices.
For U.S. farm and trade policy to address the low prices received by farmers in developing nations, our farm bill would need to seek international cooperation in setting price supports (actually raising prices) and shared responsibility of the major exporting nations for food security reserves and supply management.
Instead, these budget reforms only exacerbate the failed current policy that dooms farmers around the world to poverty because many of them won’t get any government payments. The agribusiness giants will continue to dump cheap commodities to replace local food systems with its corporate manufactured food system.
To get to the heart of the farm problem and budget deficits, the National Family Farm Coalition proposes a new farm bill solution: the Food from Family Farms Act (FFFA). FFFA establishes a price floor that would force multinational grain traders and processors to pay farmers at least the cost of production for their crops.
Our policy proposal also includes grain reserves to increase food security, and increased incentives for bioenergy crops and environmentally sustainable production. Since these new budget proposals re-open the 2002 farm bill, it’s high time we seize the opportunity and strengthen our food and farm policy to support a family farm system rather than expanding a corporate farm system at taxpayers’ expense.
While I'm posting on the "farming" theme, I want to respond to an earlier comment on this post discussing a report condemning U.S. Meatpackers for Human Rights violations. Jerry wrote:
I would be interested in how this story plays in the Iowa press, in case anyone cares to report that in a future post.
Well, after waiting a few weeks the followup answer is "it didn't play at all".
The report from Human Rights Watch is still available for your (or any media outlet that wants a story that 'writes itself') here.
