The Oregonian - Farm Bill Can Work for Real Agriculture Reform in the 21st Century

Op-Ed

By Senator Schrader

We on the House Agriculture Committee have a unique opportunity to gain the respect of our fellow Americans by building on the success of the 2008 farm bill and leading the way in proportional deficit reduction. We can do so by eliminating unwarranted payments to successful farmers in good times and reallocating some of those savings to the value-added product development and research that will be American agriculture's future.

Getting rid of direct payments would begin to build that respect. Implementing a "shallow-loss" program called agriculture risk coverage (ARC), which would pay farmers automatic subsidies that the committee chairman, ranking member and farm bureau do not agree with, completely undermines that respect. Current commodity insurance programs are geared to generally pay out at a 65 percent crop loss. This new ARC program insures 90 percent-plus of a farmer's average crop revenue. Given the historical highs for some of our commodity crops right now, this program effectively guarantees that American taxpayers will have to pay out as prices recede even slightly. And the taxpayer bears the bulk of the premiums paid. Why not put the savings from eliminating direct payments into additional deficit reduction and research to improve American farmers' and our country's competitiveness instead?

We need serious mandatory research spending in this farm bill to make sure the best farmers in the world continue to be competitive. Markets and consumers are changing. Whether it's organic and natural products, less tolerance for pesticide residue, concern over disease and contamination, shelf life, or better yields and quality to supply a rising middle class in emerging developing nations, the time is ripe to invest in research and product development. Research, testing and product development have opened whole new markets for straw, corn ethanol and beef in South Korea; fruit in Indonesia; Northwest pacific crab in Asia, especially in China; and many others. And this agriculture research isn't just a federal handout like so many other programs. It leverages money from the various commodity, fruit, vegetable, livestock and other specialty crop commissions to fund the most competitive research projects.

I get the politics and largely approve of the consensus farm bill proposed last fall and now mostly reflected in the farm bill passed by the Senate. The $23.6 billion in savings realized in the bill is agriculture's fair share toward our nation's debt and deficit issues. The House agriculture reconciliation bill for the Ryan budget that takes $33 billion only out of food stamps (officially, SNAP, the Supplemental Nutrition Assistance Program) is not the way to go. In our state, 20 percent of Oregonians are now on SNAP and half of our schoolchildren qualify for free and reduced lunches. The smart, fair and politically correct farm bill should follow the outlines of the 2011 consensus farm bill. More honesty in the accounting for SNAP qualification would yield $4.5 billion in savings.

Consolidating duplicative conservation programs, and recognizing that good crop prices will drive down some need, would yield $6.5 billion in savings. Rather than putting the majority of the $50 billion saved in eliminating direct payments into a new and indefensible long-term shallow-loss program, let's make it a short-term bridge that phases out. That way our friends in the Midwest, who are enjoying record yields and prices, can adjust their business models and expectations to the new dynamic.

We must beef up our specialty crop research and product development sections to keep American agriculture ahead of the competition in this truly global economy, or else emerging nations will end up "eating our lunch" for real.

Source