Exploiting a link between farm debt and soil erosion to aid US farmers; How debt clouds farm sector and how USDA could help case the debt burden and save topsoil
Old Snowmass, Colo. — Government debt service of private agricultural loans should be tied to soil conservation. A farmer would sign a contract with his local Soil Conservation Service office, agreeing to adopt certain soil-conservation practices in exchange for federal money used to service his old debts.
The net effect: The farmer would no longer need to abuse his land to generate the income he requires to stay in business. Once debt has been reduced to a more manageable level, federal support can be phased out for that particular farmer.
This stands in sharp contrast to current price-support payments of the Commodity Credit Corporation, which only increase as farmers scramble to grow more and the government agrees to buy more.
Additionally, farm markets would no longer be controlled by a government-dictated floor price.
Supply and demand would function more freely without supports; lacking the guarantee of high-priced government purchases, farmers will not be inclined to grow more crops than the market demands.
Farmers need to function in a freer market, and the government can facilitate this by helping them out of their current debt burdens and then letting them stand on their own as guaranteed USDA prices are gradually lowered.
This proposal is an unabashed taxpayer subsidy to particular individuals in our society. So are solar tax credits, mortgage interest deductions, and the current agricultural price-support programs.
We as a society and a government have long believed in financial incentives to foster particular behavior. Unlike most other subsidies, however, a debt-service program would have a fixed life, with the end result being a reduction in federal outlays.
Just as Congress has determined that it is in America's interest to promote home ownership and the development of solar energy, Congress should also acknowledge that we would be wise to protect farm land and the farmers who till it.
This plan is not a panacea for farmers' difficulties.
Other problems exist - and still others, such as another jump in petroleum prices or failing competitive strength in foreign markets, could arise in the future. The goal of the linked policy set out here is to ease current farm problems, putting farmers on more stable footing to deal with any unforeseen difficulties.
One major objection to the debt-service proposal is that it will bail out farmers who have dug themselves into a hole through poor financial management.
But we are all in trouble when America's agricultural sector is going down the drain.
Further, the debt-service program is not a handout, but a two-way street. The farmer must agree to manage his land properly if he is to receive government aid - a condition that does not exist today.