Certainly everything has changed since the terrorist attacks on Sept. 11, 2001. The U.S. government has new priorities that need to be addressed – as well it should.
Since no one knows the direction and time that this new anti-terrorist activity will take, no one can truly estimate the eventual economic impact. At the same time, the impact on governmental programs remains an uncertainty. One can only logically guess that much will change– including agricultural programs and policy. The Farm Bill– once a priority – has moved to a far back burner.
Still, American agriculture did receive a peek at the Bush administration farm policy objectives last week. High on the priority list are market-oriented and environmentally friendly policies, points out Wallace Tyner and Allan Gray, Purdue University agricultural economists.
USDA has released "Food and Agricultural Policy: Taking Stock for the New Century." The 116-page document represents Bush's blueprint for future farm legislation, including the 2002 Farm Bill. The report draws a clear distinction between what Bush does and doesn't support, Tyner says.
The Administration outlined three major pieces that it supports– all of which reflect components of an economic safety net.
"Those three are environmental protection – probably encompassing some form of environmental or 'green' payments. Second, a system of farm savings accounts, whereby farmers would put money aside in good years that they could draw from in bad years. Third, continued reliance and government assistance for crop and revenue insurance."
Bush clearly does not approve of an array of federally supplemented support payments or provisions that violate trade agreements. "What the
Administration is against is concentration of payments to large or wealthy farmers," Tyner says. "They're against market distortions from policies – the Loan Deficiency Payments and Agricultural Market Transition Act payments can be perceived as distorting. They're against provisions that conflict with our World Trade Organization agreements, as well as all forms of supply controls and grain reserve policies, which are proposed alternatives to current actions."
Gray specifically notes his surprise that "Food and Agricultural Policy" did not address agribusiness mergers and corporate farming issues. "Mysteriously missing from the entire piece was talk of the concentration issues," he says. He expected the Administration would have something to say on both issues.
"They talk a lot about U.S. agriculture's infrastructure and what it should look like, or being open to the idea of changing infrastructure. But I'm not sure if that suggests the Administration believes the large-farm, vertically integrated model is acceptable or not," Gray says.
Prior to Sept. 11, the House was entering debate on a 10-year bill heavy on farm subsidies. Analysts project the bill could spend more than $170 billion.
The Senate didn't have a bill, but leaders say they favor a scaled-down support-payment program, with farmer subsidies tied to improved conservation practices. These are known as green payments.
According to the USDA report, the Bush Administration's position more closely aligns with the Senate approach. "I don't think this administration is actually in favor of spending a lot of money," Gray says. The $170 billion outlined in the House version is considered a lot of money. Certainly one can surmize that the Administration will become even more fiscally conservative toward agriculture and other areas in the months and years ahead.