Since our family has
been involved in direct production agriculture for more than 100 years, we're
quite interested in discussions dealing with farm policy. The '07 farm talks
indeed promise to be lively.
While there are many facets to U.S.
farm policy, one that draws a huge amount of attention both by farmers and
non-farmers alike is farm subsidies.
And while U.S. farm payments
certainly aren't the world's greatest, they nonetheless have received a lot of
attention. Long term, World Trade Organization rulings promise we'll see
changes because some of our subsidies were determined to be illegal.
In
addition, you have to wonder how much good farm subsidies really do since
they're so quickly capitalized into land prices.
The
idea has been raised periodically to do away with all farm subsidies. Not that
an unsubsidized or less-subsidized U.S. agriculture would be all bad. But
certainly it would fuel consolidation like we have never seen before.
One of the main casualties would be
small farms, small towns and rural areas as farm size dramatically increases
while farm numbers drop like autumn leaves. Ultimately, food costs may actually
decline as bigger, more profitable and lower-cost farms become the rule.
But
this is probably not what we're going to do because social costs will be seen
as too high. And land prices could be hurt badly. Over time, though, we'll
still move in that direction but at a much slower pace.
One
of the primary discussions in on-going farm policy discussions is not so much
how we should subsidize U.S. farms but how we can encourage the farm industry.
For example, a justified subsidy was the hard white wheat incentive
payment to encourage production of a new class of wheat to open up foreign
markets.
Other
supports are less justified. For instance, some say the U.S. government should
add more subsidies to crop insurance so we can insure up to the 85 percent
level, then plant dryland corn with no more than 6 inches of moist soil Ð in a
drought no less. Is this the extent of the American entrepreneurial
experience?
Programs
like this absolutely send the wrong message not only to farmers but to the
non-farm public alike.
I've also been intrigued as to why
dryland corn acreage has increased generally at the expense of dryland grain
sorghum. In previous years, KSU Farm Management Program's enterprise analysis
showed dryland corn rarely covered all costs while dryland milo was
consistently profitable. So why less milo?
My theory is that things outside
the market, such as better insurance or higher federal payments, encourage one
crop over another. To me this violates one of the 10 commandments of farm
policy: Thou Shall Let The Market Decide.
I think we can look to the specialty-crops people
for justified new direction in farm policy. Fruit and vegetable growers say
they don't want direct cash payments. Instead they want help with market
development and promotion, targeted research and help with sanitary and
phytosanitary issues. Great idea!
To me, research makes a lot of
sense as a justified way to support farming. We all know the story Ð give a man
a fish or show him how to fish. We need to dramatically increase not only state
land-grant university budgets on research, but get USDA to underwrite more of
the burden. And, yes, farmers need to contribute to these research efforts as
well.
Help us find the most profitable
crops and show us how to grow them. Help us develop new higher-yielding crops that
have better disease resistance. How much less subsidy do we need when we have a
new wheat variety that yields three or five more bushels per acre? Or that
doesn't require $20-per-acre fungicides. We need wheat for industrial uses, for
ethanol production and wheat or other crops like triticale for feedgrains. This
is what former U.S. Ag Secretary Earl Butz talked aboutÑadapt or die.
Remember, too, an essential role of
farm policy is long-range and strategic planning. Not only by regions and
states, but also by commodities. For instance, looking 25 years ahead, what are
we going to do when the Ogallala Aquifer is dried up? Best bet is this valuable
natural resource is already half gone.
How will we in the central and
southern Plains support the crown jewel of U.S. agriculture Ð the huge beef and
dairy cattle industry as well as our swine industry Ð without irrigation or
with significantly less of it?
What are we doing to develop the
alternative crops and production programs that will be needed. Has anyone
written the long-range plan for evolving High Plains agriculture?
Maybe we should also ask why do we
turn to the government for help with things that we can often do ourselves?
For example, one of the best ways possible in dealing with risk is simply watching
your debt-to-asset ratio. Aren't we farmers in charge of that? Farmers and
everyone else needed massive government intervention in the l930s. But until we
have another national crisis, can't we do with less?
Finally, I wanted to make a comment
about the Conservation Reserve Program. Granted, this program which arose in
the mid Ô80s ag crisis has done wonders for soil and water conservation and for
wildlife. But beyond that, it has to be ranked as one of the worst farm
programs of all time in terms of what it has done to our rural and agricultural
infrastructure as well as to our schools, churches, hospitals, elevators and
local businesses and, in general, to our way of life.
Over
the past l00 years, probably the top two greatest threats to the High Plains
were a conservation problem in the '30s and ironically, a conservation
program that started a half century later.
With
over 3 million acres now in CRP in Kansas and 36 million nationwide, this
program is now our state's third largest crop behind wheat and corn. And yet
this land produces nothing. For all practical purposes, the acreage has simply
vanished from our rural counties.
But
with all the interest in ethanol and bio-energy, it's time to not only cap the
program, but also allow non-penalty early exits from CRP.
Louise
Ehmke, chairman of the Governor's Agriculture Advisory Board, farms in Lane and
Scott counties of western Kansas with her husband, Vance. The Ehmke family
homesteaded there in 1886, the same year the county was formed.