The Row to Hoe for Farmers
With the senate soon to debate the agricultural spending bill, the plight of some American farmers is back in the spotlight.
Prices for farm commodities - especially corn, wheat, and soybeans - have plummeted. Driving them down is a combination of bad weather, overproduction, good weather and huge crops elsewhere, and a collapse in demand from Asia. The northern prairie states are especially hard hit.
A group of Senate Democrats from that region wants to add $10 billion in "emergency" spending to the agriculture bill. They also call for scrapping the 1995 Republican "Freedom to Farm" agriculture-reform law.
By labeling the funds "emergency" spending, Congress would get around the budget caps agreed to in the 1997 balanced-budget agreement. But to call such spending an emergency is to abuse the process. It eats up the budget surplus, gulping down money the president wants to pump into Social Security and Medicare and the GOP wants for a tax cut.
While $10 billion in new aid to farmers seems high, whatever figure Congress and the White House might agree on in addition to the help that farmers now get should be paid for with cuts elsewhere.
In any event, Congress should reject the proposed return to outmoded New Deal price guarantees. That system skews production, rewards inefficient farming, and creates foodstuff mountains that only further depress prices. It's no way to compete globally.
But the federal government can take several steps to help farmers:
*Resort less to banning farm exports as part of economic-sanctions packages. This week's announcement that US farmers can sell to Iran, Libya, and Sudan was welcome.
*Fight harder to open up foreign markets to US farm products. Redouble efforts to persuade China to join the World Trade Organization on US terms. Renew the president's fast-track trade-negotiating authority.
*Change the tax code to allow farmers (and other self-employed people) to deduct all their health-insurance premiums, as large corporations can.
*Eliminate or reduce inheritance taxes, which often prevent land-rich but cash-poor farmers (and other small-business people) from passing their assets on to their children.
(c) Copyright 1999. The Christian Science Publishing Society