The Farmer And The Bill

This story was written by Cara Harshman, Badger Herald

However, these students will not be thinking about which processing plant inspected their recently grilled brat. But if they breathe, eat or drink, agricultural policy determining where that brat came from directly impacts them.

About 65 million people live in rural America, but only 2 million of them work in the farming industry. The majority of those farmers are currently following the progress of the 2007 farm bill as it makes its way through Congress.

"Policies like the farm bill are not sexy, but they have drastic consequences for poor communities here in the U.S. and abroad," said Laura Rusu, spokesperson for Oxfam America, a nonprofit organization working nationally and internationally to solve poverty, hunger and injustice.

The idea of a farm bill arose during the Great Depression. In 1949, the first farm bill was designed to protect farmers and stabilize the rural economy. More than half a century later, the goal is still the same.

"It's something everyone should know because policies trickle down to cafeterias at Gordon Commons and dinner tables," said Anne Lupardus, spokesperson for U.S. Rep. Ron Kind, D-Wis.

The farm bill is revised every five years, evolving with the changing face of the American farmer and fluctuating international economy.

SAY 'CHEESE'

It is no secret that Wisconsin residents love cheese - curds, wheels, string cheese, grilled cheese. You name it, Wisconsinites eat it.

According to the 2002 U.S. Department of Agriculture's Census for Agriculture, Wisconsin ranks second in the nation - behind California - for sales of dairy products.

U.S. Sen. Herb Kohl, D-Wis., supports programs in the farm bill that assist Wisconsin's dairy farmers, including the Milk Income Loss Contract Program.

MILC first appeared in the 2002 farm bill. Aiming to protect Wisconsin dairy farmers if dairy prices fall, MILC provides a financial safety net for dairy farmers.

According to Kohl's spokesperson Joe Bonfiglio, MILC is "one of those programs that helps not only farmers but entire communities that rely on dairy prices."

When the market price for milk falls below the desired level of approximately $10 per 100 pounds, the government buys surplus cheese, butter and nonfat dry milk and stores it in warehouses.

But the surplus dairy does not just sit in storage. The government redistributes it to school lunches, giveaway programs and overseas projects.

"What we basically do is keep demand up for milk," University of Wisconsin agriculture professor Bruce Jones said.

Picture the basic supply and demand curve. When milk market prices are low, Jones said the government pays farmers subsidies to make up for the below average prices they are receiving for their product, "keeping them afloat."

"As supply goes out to higher and higher levels, the price is going to go down," Jones said. "What we try to do is make up the difference between what the market price is and what we want the price supported at."

Currently focused on the 2007 farm bill, Kohl has been "working closely with the Senate chairman to push Wisconsin priorities: MILC and state meat inspection," Bonfiglio said.

Under existing federal law, it is illegal to sell state-inspected meat across state lines. Meat inspected by the Wisconsin Division of Food Safety is therefore sold exclusively in Wisconsin.

Currently, only meat approved by the U.S. Food and Drug Administration is sold between states. In order to expand the Wisconsin meat market and create more business for farmers, Kohl is pushing for &quotstate inspected meat to be marketed and sold across state lines," Bonfiglio said.

According to a statement Kind released last week, Wisconsin's "specialty meat industry rivals our dairy in quality, and I believe these products have the same potential to be just as famous and widely available [as our cheese]."

Kind said 2,100 state inspected meat processors exist in the U.S., and over the past 10 years, there have only been 16 instances of meat recall. However, in the same 10-year period, there have been 717 meat recalls from federally inspected processors.

According to the U.S. House of Representative's version of the 2007 farm bill, MILC is extended until 2012, and states with meat inspection programs identical to federal regulations are allowed to ship meat and poultry products to other states.

The U.S. Senate is also currently discussing their version of the 2007 farm bill.

SECURITY OR HANDOUTS?

Farming is a risky business. At any time, a drought could destroy an entire harvest or market prices could plummet.

To provide some semblance of protection for commodity farmers, the government has programs to keep them in business and counteract any potential crop and monetary losses.

Commodity is the key word, and according to Oxfam America, most small family farmers in the U.S. do not receive subsidies, while the top 10 percent of subsidized farmers receive about three-quarters of all government subsidies. These payments amount to anywhere from $12-20 billion per year, depending on crop market prices, Rusu said.

Historically, subsidies are tied to the production of commodity crops like corn, wheat, soybeans, cotton and rice. For a significant return on commodity crops, farmers need to produce high quantities, meaning owning or renting a lot of land, producing crops efficiently and having large-scale farm equipment, none of which is cheap.

"The way you are competitive in our marketplace in producing those commodities is to be the most efficient and lowest cost producer you can be," Jones said.

The government acknowledges the high price of land and equipment by compensating farmers monetarily. According to data from the Environmental Working Group, Wisconsin farmers received $791 million in commodity program payments for program years 2003 to 2005. Jones said these commodities are generally produced by megafarms with a large amount of land and a large labor force.

"One of the biggest contentions we have with the farm bill is the commodity title," Rusu said. "Subsidies really keep producers on a treadmill of consolidation."

In 1996, the government attempted to wean commodity farmers off large subsidies with a transition program. In reality, the payment program was hardly a transition at all, seeing as the 2002 farm bill extended the "direct payment" system. To this day, farmers are guaranteed annual lump sums, regardless of what is happening in the market, according to Lupardus.

Lupardus also said direct payments are the "most unjustifiable payment."

What were supposed to be temporary payments have turned into "entitlement payments," she added.

These subsidies not only make already rich farmers richer by giving them no-questions-asked subsidies, but they widen the gap between big farmers and small family farmers, according to Lupardus.

Big farmers use subsidies to buy more land, invest in more efficient machinery and buy out small farmers who cannot afford to stay in the game.

"The big guys are gobbling up the little guys," Lupardus said.

Mark Russell, co-owner of Russell Brothers Farms is a "big guy" in Wisconsin. The Russell brothers keep 375 cows amid rows of corn and soybeans on their 7,000 acre farm in Shullsburg, Wis.

According to the EWG database, Russell received $389,646 in crop subsidies in2005 alone, ranking fifth among subsidized farm businesses in Wisconsin.

"Most of the money goes [toward] increased rent," Russell said. "It was not a 'gimme,' it was a 'keep me in business.'"

Of the farm's 7,000 acres, the Russell Brothers Farm owns 15 percent, while the other 85 percent of the land is rented from investors.

Russell and his brothers bought the farm from their relatives 27 years ago. It had been in the family for 170 years.

"We are a family farm," Russell said. "We want to make a decent living. That's why we're big."

In addition to expanding direct payments, the 2002 farm bill established a new program that pays farmers the difference between the current market price for a crop and the target price.

Thus, when market prices are low, the government pays farmers more money. But when market prices are high, the government pays less. The 2002 farm bill calls these supports "countercyclical payments."

Russell expects the direct payments he receives will eventually diminish. But "the countercyclical payments need to stay," he said. "We need a safety net as much as a guy who's running a few hundred acres. It's the same thing, just more land, more debt and bigger headaches."

WHAT ABOUT THE LITTLE GUY?

A mere 42 miles north of Madison, in Randolph, Diane Westra tends the cabbage on her 80-acre farm. Thirty-one years ago, Westra and her husband inherited Mammoth Produce from her husband's family.

Westra has never heard of the farm bill.

"I'm not sure," she said. "Maybe it doesn't apply to me or maybe I'm using some of its programs and don't know it."

Westra is not alone.

Many small farmers at the Dane County Farmers Market had either not heard of the bill, were not familiar with any of its programs or did not care about subsidies.

John Aue has been farming potatoes on his Richland County farm for 18 years. He does not want anything to do with subsidies.

"I don't think all farmers need to be subsidized," he said while weighing out two and a quarter pounds of potatoes. "It's the traditional big crops that need them."

Dan Deneen from Black Earth Valley Farm 30 miles west of Madison has a slightly different stance.

"[The farm bill is] a waste of taxpayers' money completely. It was started during the depression to save the small farmers, and now it has become very destructive," Deneen said. "When you allow that power to go to Washington, that power is going to be manipulated by big money and big special interests."

WHERE ARE WE NOW?

Farm income is at an all-time high. Crop prices are soaring, and commodity farmers are thriving. The federal government demands more corn than ever as it invests in corn ethanol instead of more efficient renewable energy sources.

Nevertheless, the U.S. government is in the midst of discussing a $286 billion 2007 farm bill funded by American taxpayers.

"These are some of the best profit years the U.S. farmers are going to see in the last decade or so," Jones said. "The need for payments from the government is very low."

The U.S. Senate is currently discussing and formulating their version of the 2007 farm bill. The U.S. House passed theirs in July with a 231-191 vote, with new and improved programs for rural development, conservation reserves, nutrition and energy.

But Bonfiglio said it's unlikely the nation will see a compromise between the U.S. Assembly and U.S. Senate's versions of the bill before January.

It's a waiting game now while Washington deliberates.

"It's far broader than just a 'farm bill,'" Bonfiglio said. "It's important to watch it as it moves forward to see where the country is headed."
© 2007 Badger Herald via U-WIRE