USDA farm payments hit new record


Rep. Charles Stenholm might be right. For agriculture, says the ranking minority member of the House Ag Committee, the Y2K frenzy was nothing compared to what could hit the industry in Y2K2 — or 2002, the close of the current farm bill.

      Experts and would-be experts are already posturing for this change or that program, but what final plan will be proposed across the Potomac is really anyone’s guess. Assistant Editor Jackie Cummins’ front page article this week on the farm bill highlights just a few of the opinions entering the debate.

      What I do know is that the legislative process is driven by public opinion. That means the really big question is: Where do we stand in the public’s eye?

      Public perception of agriculture is the key to its future. Retired OSU ag economist Luther Tweeten hit the nail on the head when he said a few years ago that, “The future of the industry and farm policy will not be decided by just the facts about farm structure and problems, but also by how the public views agriculture.”

      That’s not fair, but didn’t your mother ever tell you that life’s not fair?

      Monday’s announcement that the USDA distributed a record $28 billion — $28 billion — in direct assistance to U.S. farmers in the fiscal year that ended Sept. 30 isn’t likely to increase consumer support. That’s a lot of hard-earned taxpayer dollars, ours included.

      Without its assistance, USDA says, farm income would have hit its lowest level since 1984.

      In 1999, direct government payments accounted for an unprecedented 47 percent of net farm income. That figure is likely to climb in most states in 2000. And so, despite pitifully low agricultural commodity prices, the finances of many farms remains “robust,” to use the USDA’s term.

      Yes, some of the government’s payments are in the form of emergency assistance. This year’s drought in the South and Southwest, floods in the Northern Plains and the wild fires out West boosted U.S. agricultural spending, as did the drought last year and other weather-related disasters.

      But you can’t deny that some of the assistance and current farm policy is contributing to an upward spiral of production and downward spiral of commodity prices. Grain farmers aren’t basing decisions on the market, they’re marketing based on the loan rate and are continuing to add to largest existing supplies of major field crops.The flip side to the anti-assistance argument is that prices fail to keep pace with farmers’ cost of production. Inputs skyrocket while prices fizzle. The total for expenses is projected to increase about 4 percent in 2000, according to the USDA, led by a $2.4 billion increase in fuel expenses.

      Regardless of your personal opinion, producers cannot afford to tune out the debate that is beginning to stir. Whatever farm policy survives the battle will be designed to meet society’s goals, not just agriculture’s desires.

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