Critics contend that farmers get paid for not farming, that most of the subsidy money goes to the largest farmers and that subsidies for corn, soybeans and wheat - but not fruits and vegetables - amount to a subsidy for obesity.
Area farmers counter that critics miss the rationale behind farm subsidies and the realities of farming for a living.
Richard Cortese, who is a farmer, Bell County commissioner and a state director for the Texas Farm Bureau, said Thursday that subsidies were created as a way for farmers to break even in a volatile business.
“People like to pick on agricultural subsidies but no one is bothered by subsidies for low-income housing,” Cortese said.
“No one seems to get too upset when rich landlords build low-income housing and get subsidies for that. You don’t hear a lot of criticism about medical subsidies, like Medicare and Medicaid.
“People have the idea that government is just paying you not to farm or to farm less, but the truth is that we have subsidies to keep people in this country from paying high food costs.”
Robert Fleming, a Bell County grain and livestock producer, agrees.
“I’ve always said that the farm bill has two purposes,” he said. “One is to pump money into rural communities and to keep food prices cheap. Without it, there would be a lot less farmers and ranchers around.”
Many of the farm subsidies being paid today have their roots in the 1920s and 1930s when the Dust Bowl and Great Depression hit the county, especially the rural areas, with a double whammy.
The Agricultural Adjustment Act of the 1930s was enacted to help control farm prices by reducing and controlling the supply of basic crops. Congress drafts, debates and passes new legislation every five to seven years.
Under current legislation, farmers who grow wheat, corn, cotton, rice and soybeans receive direct payments and counter–cyclical payments.
Direct payments are fixed annual payments linked to a producer’s past production. Wheat, corn, sorghum, barley, oats, cotton, rice, soybeans, some oil seeds and peanuts are subsidized by direct payments.
Counter–cyclical payments provide subsides when market prices are below levels set forth in farm bill legislation.
Other types of subsidies include marketing loans, conservation subsidies, insurance, disaster aid, export subsidies and agricultural research and statistics.
James Richardson, co–director of the Food and Agriculture and Food Policy Center at Texas A&M University, said Friday it looks like the direct payments and counter–cyclical payments as well as most of the other payments will remain mostly intact in the new farm bill.
“The way it works now is sort of like an insurance policy or a workman’s compensation policy,” he said. “With workman’s comp, when you get sick you get a payment.
“There hasn’t been any counter–cyclical payments to wheat farmers since 2002. The government paid a little to corn farmers in 2003. But as long as prices stay above the target price, those payments aren’t made.”
Richardson said payments to cotton and rice producers have been made because those markets have been depressed. As far as farmers getting paid to grow nothing, that’s been off the book since 1985 except for the Conservation Reserve Program, which pays landowners to grow grass and trees as part of a land and soil conservation effort.
“Even there, they are not growing nothing,” he said. “They’re growing grass or trees or whatever is called for to keep the land in good shape.”
In July the House passed a bill that preserves the existing system of subsidies for commercial farmers while adding billions of dollars for conservation, nutrition and new sectors.
The bill is now in the Senate where senators are working to tighten rules on tax shelters to pay for biofuel incentives, conservation programs and a new disaster–relief program.
Fleming said Thursday that subsidies are the government’s way of putting money into the rural farm economy.
“Merchants in these small communities know when these payments are coming because that’s when farmers buy equipment or fertilizer and everything else they need to keep going,” he said.
“The corn market is very volatile. We don’t make much over the production costs, especially with the way costs have tripled over the last few years.”
Rising costs for fuel, fertilizer and farm equipment have more than offset any rise in corn prices, which started the year at about $4 a bushel but had dropped to $2.80 to $3 a bushel by the time the corn was harvested.
“Fuel has gone from $35 a barrel to $80,” Cortese said. “Steel prices have risen more than 100 percent over the last three years, which has impacted the cost of equipment. As farmers, we are very dependent on oil products. Fertilizer was under $200 two or three years ago but it’s closer now to $500 a ton than $400.”
“Would I survive without farm subsidy payments?” Fleming said. “Probably, but it would be tough. What we’re making now barely meets our production costs.”
He pointed to a story from the Washington Post, printed recently in the Telegram, as an example of how the farm economy is rosy because of high corn prices and the ethanol boom.
“The story talked about $4 a bushel corn, which we haven’t seen for a long time,” he said. “It talked about ethanol subsides and how the money is just rolling into rural America.
“Well, it’s not that way around here. It’s not that way up there either. There is such an element of risk with markets and weather. It’s just not that way, but people have the idea that we’re getting rich out here. That’s just not the case.”
Cortese and Fleming have at least one ally in Congress. In an op–ed piece, Minnesota Democratic congressman Collin Petersen, chairman of the House Agriculture Committee, said his experiences talking to farmers has convinced him that “editorial board writers don’t spend a lot of time on farms.”
“Every year, farmers and ranchers invest thousands of dollars into their crop, buying equipment, fuel, seed, fertilizer, water, labor and other inputs,” Petersen wrote. “They invest this money with no assurance that the seeds they put in the ground will produce a crop that will cover their investments, much less bring in enough money to support their investments.”
Petersen said the 2007 farm bill will include some reforms, including lower limits on adjusted gross income that prevents millionaires and wealthy non–farmers from receiving farm subsidies, and the largest federal investment in fruits and vegetables in history.
U.S. Rep John Carter, R–Round Rock, said in a prepared statement on Friday that agriculture producers have little to no control over natural threats such as flood or drought that can destroy a crop in the field before it is harvested.
”Though I don’t typically support government intervention, it is vital to our growth and security as a nation to maintain a strong domestic supply of food and fiber,” Carter said in the release. “It is important that the government provide a safety net that meets the needs of Central Texas farmers and ranchers as they work to meet the agricultural needs of our nation.”
Cortese said a solid farm bill that protects agriculture producers is necessary for the security of the nation.
“Agriculture is a high-risk business,” he said. “It’s important that we don’t become dependent on foreign sources for our food and fiber. Fuel for energy and transportation is important, but food and fiber provides fuel for the body. We can’t live without it.”
Richardson said that if the Senate can’t pass a farm bill and doesn’t file a one–year extension to keep the current bill in place in the interim, then the bill will revert to permanent 1949 legislation.
“That bill provided high price supports based on parity,” he said. “It was a way to make adjustments after World War II when American farmers were told they would have to feed the world.
“It was quite a different bill than what we have today. It has no support on the Hill. I don’t think anyone wants to revert back to that bill.”
ccoppedge@temple-telegram.com
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