Finally, a Farm Act
THE 1996 farm bill, enacted last week, proved that worthwhile legislation can emerge in an election year amid endless budget wrestlings.
Political necessity teamed with nature to hasten the long-debated agriculture measure. Planting season had begun. Farmers had to know what Congress had in store for them; the politicians knew what was in store for many of them if they left the farmers hanging.
The '96 act marks a turning point in the relationship between farmers and government. It veers away from the price-support system put in place during the Great Depression, when a third of Americans depended on farm income and when international trade in agricultural products was minimal. Farmers who signed on with the old program had to plant what, and how much, government planners required. What they lost in freedom, however, they gained in stabilized income.
Many of today's business-oriented, technically sophisticated farmers chafed under that system. Other, often smaller operators pinned their livelihoods to it, and the battle to continue farm subsidies could revive. President Clinton has promised to push for a stronger "safety net" next year if he's reelected.
Meanwhile, producers of a few commodities - notably peanuts and sugar - had enough political clout to retain traditional price supports. Dairy farmers, another sensitive constituency, lost much of their federal price cushion, but the option of regional "compacts" to bolster milk prices remains - though it's tied to a finding of "compelling public interest" by the secretary of agriculture, which could be hard to come by.
In the long run, allowing farmers to plant according to their reading of market demands should boost farm incomes. In the shorter run, however, it won't save the government a lot of money, since a program of gradually declining set payments will be in place for the next seven years as a kind of weaning process. Still, proponents of the new bill expect savings over that period in the range of $2 billion, compared with what Washington would pay under the old system.
The federal government is moving into a different, less-dominant role in agriculture, but it's hardly leaving the stage. For example, this year's farm bill strengthens programs that encourage farmers to conserve farmland and avoid environmental damage. It also includes $200 million to buy and restore land in Florida's Everglades. The planting freedom given farmers should promote better use of the land, for it's in farmers' interest to preserve the quality of their basic resource, the soil.
The hand of government is better employed in protecting a critical resource like land than in trying to calibrate the market. The shift begun by this year's legislation was helped along by the strong market for traditional US farm products such as corn, wheat, and livestock. The real test of the new approach, in Washington and on the farm, could come when the market shifts.