Any time you get thousands of farmers together in one room, you’re bound to hear one of three things dominating the conversation: farm policy, politics or the weather. At this year’s American Farm Bureau Federation (AFBF) annual meeting in Honolulu, Hawaii, farm policy was to be top-of-mind in nearly all conversations and speeches — especially because this year is a farm bill year.
In fact, AFBF even dedicated one of their breakout sessions to discussing the farm bill and what farmers can expect now that the super committee tasked with cutting the federal deficit has failed.
AFBF Senior Director of Congressional Relations, Mary Kay Thatcher, provided farmers in attendance with some interesting information regarding the farm bill — and it certainly wasn’t all good news.
According to AFBF, now that the 2012 farm bill will be drafted in a more traditional fashion, it may not even be finished before the close of 2012 and may well stretch into 2013.
That also means that more cuts may be made because, according to Thatcher, many politicians consider agriculture to be the low-hanging fruit from which federal funding can be picked.
Now, before you say this is a traditional everyone-is-out-to-get-agriculture post, consider this: The agriculture community is more than happy to do its fair share when it comes to helping reduce the federal deficit, as evidenced by the proposal the House and Senate Agriculture Committees submitted to the super committee.
According to AFBF, agriculture’s fair share of decreasing the federal deficit would be about $6.7 billion. The House and Senate Agriculture Committees’ proposal to the super committee would have cut $23 billion over ten years out of agriculture-based programs like direct payments and conservation — significantly more than agriculture’s fair share.
To get that $23 billion, direct payments were eliminated and conservation programs were reorganized and reduced. The agriculture committees’ farm bill proposal did include crop insurance and allowed for new programs like ARC and STAX — both shallow loss programs aimed at supporting farmers when times aren’t so good. However, under a more traditional farm bill drafting process, these too could be greatly reduced or eliminated, which leads most people to question what that will mean for farmers.
But, the real question isn’t what will happen to farmers — because most farmers can already answer that question. Most consumers — or at least the talking heads on network and cable TV — believe that farm supports serve only to help wealthy farmers with large operations get richer. They say, when it comes to farm supports, we should rip the Band-Aid off quickly and get rid of all farm supports at the same time. After all, ripping the Band-Aid off quickly will mean it will hurt less, right?
Unfortunately, commodity prices won’t always be high, the weather won’t always be agreeable and operation costs will continue to go up. Those variables affect all farmers, not just the wealthy.
The real question is what will happen to the farming and rural communities in which those farmers live. Because, aside from supporting farmers, farm supports also aid rural and farming communities.
Like the old adage says, farmers are land-rich and cash-poor. Farmers receiving payments from crop insurance or the Conservation Reserve Program (CRP) don’t just bury the money in the backyard, stash it under the mattress or stick it in a cash-bearing mutual fund.
Farmers receiving payments from farm support programs put that money back into the community. They use that money to buy tractors from local dealers or make equipment repairs at local businesses. They use that money to improve their operations or invest in the future. They buy seed form local dealers, fertilizer from local cooperatives and even pay off outstanding bills.
In most cases, the money farmers receive from farm supports really serves to stimulate the economy of rural America — a point proven when many rural and farming towns weathered the recession better than many other areas.
In the end, ripping the Band-Aid off quickly still hurts and, in this case, it will hurt more than just farmers — it will hurt rural economies, too.