Farm Bill Warm-Up

Have your ears been burning out there in the Heartland? Lawmakers in the Beltway are suddenly talking a whole lot more about agriculture. Not surprisingly, we are also inside of two months away (as I write this column — as you read this, a handful of weeks) from what could be a landmark election day in November.

Of course, much of it now is meaningless posturing — attempts to demonstrate commitment to constituencies in the event anyone has felt neglected. But some of the early salvos being hurled around the Beltway regarding the impending Farm Bill debate are worthy of taking note going into the 2007 season.

As you should already know, the 2002 Farm Bill is set to expire next year. Simultaneously, the world has been putting tremendous pressure on the U.S. to eliminate government subsidies to create a better competitive balance for agriculture around the world. The lightning rod for this has been the Doha Development Round of the World Trade Organization (WTO). The Doha Round has been charged with, among many things, lowering agriculture trade barriers around the world, permitting freer trade between countries. 

So far, its biggest accomplishment has been to force countries to draw lines in the sand as to how far they are willing to negotiate, and most experts put the likelihood of a meaningful outcome in the current environment at near zero.

So what? Well, many in agriculture hope that with Doha on life support, the U.S. won’t have to make any hard decisions about subsidies, and might just reauthorize the old farm bill. For better or worse, that’s probably not in the cards.

There are a number of reasons for this. One of the biggest is the two-headed monster of the growing federal budget deficit and the ongoing (and with no end in sight) War on Terrorism. There is little taste for what the public will surely perceive as excessive government subsidies in the kind of rapid, once-over-lightly analysis our media gives these sorts of topics.

The second is the pulse of the Beltway, which according to some observers has taken a decidedly negative bend against what it perceives as greedy corporate farmers peeling away precious federal dollars from a strapped government. Unfortunately, there is some truth to the argument that undeserving growers are getting some healthy cash payouts.

The third comes directly from the horse’s mouth, so to speak — Ag Secretary Mike Johanns. Earlier this year he warned agriculture that it would need to do its share to help reel in governmental spending, and to help craft farm policy that both protects U.S. ag interests and reduces the risk of WTO challenges globally. Recent speeches indicate that the impaired Doha situation will not impede reform discussions.

“At the risk of irritating some people … who might not support farm programs, let me tell you — I do,” said Johanns in a speech to the Cato Institute last month. “I have always argued … that federal investment in agriculture is wise, it’s worthwhile policy. But how we do it is enormously important. It should be done in a way that’s pro-trade, pro-growth, and fiscally responsible. That’s what’s expected of us by our farmers and ranchers and taxpayers.”

Stay tuned. It could turn into a very bumpy ride.

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