GOP Draws Line in the Soil On Farm Subsidy Program
| ELKHART, IOWA
CHARLIE CAMPBELL stands in the shadows of his tractor shed, flipping through sheets of paper. The aerial maps of his fields are meticulously marked to show which acres, according to the federal government, he must leave fallow.
''The farm program is a necessary evil,'' says Mr. Campbell, who grows corn and soybeans on the loam-rich plains north of Des Moines. ''It helps keep the price of food real cheap, and there needs to be some kind of government safety net for farmers.''
If farmers across America's Grain Belt agree with Campbell, a large number of Republicans in Congress don't. The farm bill is up for renewal this year, and it lies at the intersection of the two major GOP themes: deficit reduction and smaller government.
Consequently, the outcome of the battle over the farm bill, which includes crop subsidies, export supports, and food stamps, will be central to determining the success or failure of the so-called Republican revolution to overhaul the New Deal model of government.
One set of Republicans in Congress argues that farm-support programs must be reduced along with all other federal programs to help balance the budget by 2002.
The House and Senate Republican budgets unveiled last week call for significant reductions in spending on federal farm supports. ''The issue comes about because of the seriousness of the need to balance the budget,'' says Sen. Richard Lugar (R) of Indiana, chairman of the Senate Agriculture Committee. ''A monumental debate will occur after the budget bill is passed.''
But a more ideological group of GOP lawmakers argues that government has no business being down on the farm at all. This group seeks to replace the New Deal model of big government with strict reliance on the free market.
The Clinton administration, in contrast, has begun framing the farm bill debate as a question of protecting rural America and is advocating a policy that leaves intact the core programs that it believes protect the family farmer.
''It is dangerous to have agriculture programs that are budget driven,'' says Agriculture Secretary Dan Glickman. ''If we take out the kind of money the Republicans are talking about, the question is how are we going to do it? ... In certain parts of the country -- across the plains -- we will see very dramatic effects on land values.''
Federal farm programs were first implemented in 1933 as part of President Franklin Roosevelt's New Deal project to lift the country out of economic crisis. Sixty years later those programs still affect everything from grains to peanuts to livestock, and help stabilize the prices of products from bread to cosmetics.
Budget cutters in Congress, attempting to bring federal spending into balance by 2002, argue farm programs must be significantly reduced along with other federal programs. The House Budget Committee last week passed a resolution that includes a provision to cut agriculture spending by $9 billion over five years.
Across the Rotunda, Senator Lugar has outlined roughly $15 billion in cuts by decreasing farm subsidies 3 percent per year through 2000 and eliminating a government-subsidized program that helps farmers compete overseas. Both the House and Lugar's plan would reduce target prices for raw commodities, such as wheat and corn, to just above probable market prices.
But several farm state lawmakers, including Rep. Pat Roberts (R) of Kansas, chairman of the House Agriculture Committee, worry about the impact of such deep cuts on farmers and consumers. Mr. Roberts is trying to lower the House requirement to $5 billion. These critics also worry that, while Lugar's home state of Indiana has both the weather and soil conditions to adapt to decreases in farm programs, states not capable of growing a diversity of crops, such as North Dakota and Wyoming, will face great difficulty.
Farmers and agricultural economists in the Grain Belt, meanwhile, worry about both short- and long-term affects. Few farmers voice avid support for the farm programs, but most agree that they boost the small farmer and insure adequate stocks from year to year -- which in turn stabilize prices.
Moreover, they note that farmers already took a 15 percent cut in the program in 1990, and farm subsidies have dropped from $26 billion to $10 billion in the last decade. Further cuts could force farmers still recovering from the agriculture recession of the 1980s off the land.
''Twenty percent of farmers still face significant financial and economic problems as part of the holdover from the 1980s,'' says Neil Harl, an agriculture economist at Iowa State University in Ames. Deep cuts in supports ''will make life very difficult on that group of people.''
There are roughly 2 million farms in America, the vast majority of which are small. Critics of the farm program point out that 85 percent of these farms account for only 21 percent of farm sales. These critics point to the remaining 15 percent as the culprit: Their net earnings are above the national average, yet they receive 80 percent of farm program outlays.
Vance Ehmke, president of the Kansas Association of Wheat Growers, disputes these figures. If a farmer grosses $100,000, he says, by the time he pays off land, equipment, and other expenses, he grosses on average about $28,000.
Both Mr. Ehmke and Professor Harl see other effects from less government support on the farm, too: lower farm income, decreased land values, and less soil and water conservation. This will hasten the trend toward larger farms. ''Farm size will continue to get bigger,'' Ehmke says. ''Over the next 10 to 20 years we will see farm consolidation like never before.''
At the end of the process, when the farm and budget bills are signed into law, most lawmakers predict that changes in farm policy will be less severe than the current numbers forecast.
But farmers are nonetheless preparing themselves for ever-shrinking government support and increasing global competition. On a broad stretch of Kansas prairie, wheat farmer Chris Noland climbs out of his tractor after preparing a field for planting milo, a feed grain. He is not opposed to the elimination of subsidies.
But, like many growers, he worries that if farm prices jump in a bad harvest year, the government will force farmers to sell crops at lower prices to protect the consumer. ''The problem is, once you get government out, that's fine,'' he says, leaning up against the tires of his tractor. ''But that won't happen. The program stabilizes food prices. When the market forces prices up, will the government intervene to protect the consumer?''