FAIR is foul for farmers and consumers
by Larry Swartz and Katherine Ozer
The title of the 1996 farm bill is the "Federal Agricultural Improvement
Reform Act of 1996," with the ironic acronym of FAIR. But it is only
fair for corporate America, not the family farmers or consumers of this
Passage of the 1996 farm bill and its commodity provisions, with the perverse
name of "Freedom to Farm," has been touted as "historic"
and "major reform" by its proponents, but this is far from the
reality. In fact it is a smokescreen for expanding corporate profits by
dismantling any semblance of an effective farm program - one that maintains
adequate food reserves and responds to both domestic and world demand for
U.S agricultural products. Instead, this bill reduces the subsidy level
to family farmers and severs the future relationship between crops grown
and payments received. The unfair distribution of payments under the farm
program is broadened, since the history of individual farms forms the basis
for future payments.
The only freedom this legislation provides is the freedom for farmers to
go broke while corporate agribusinesses are free to increase their profits.
The commodity provision of the farm bill incorporates the free-trade agenda
that was rejected in the proposal to "decouple" farm payments
and production levels in the 1985 Farm Bill. U.S. negotiators forced similar
provisions on trading partners in the General Agreement on Tariffs and Trade
(GATT). Passage of decoupling in the trade agreement and the farm bill amounts
to a major corporate subsidy to agribusiness commodity exporters.
The benefits to corporate America don't stop at the commodity section. While
the bill provides for some short-term conservation improvements, there are
long-term setbacks for the domestic and global environment. The bill creates
the economic necessity to maximize domestic production, which increases
land under cultivation and production. That promotes withdrawal of land
from the Conservation Reserve Program and threatens more sustainable production
The credit section of the bill was glossed over during Congressional debate.
It was depicted as an effort to reform what some viewed as farm credit programs
that were no longer needed. In fact it is a major rollback of important
legislation enacted in the late 1980s in response to massive farm foreclosures
and bankruptcy across the country. It jeopardizes important provisions of
the 1987 Agricultural Credit Act that provided farmers with the tools to
refinance their farming operations - and saved the government money. Farmers
who obtained government assistance through a write-down or write-off of
their debt in the early 1980s, as well as farmers who emerged from bankruptcy,
are now being told that they are ineligible for any future loans effective
this past April 4.
These policies are both unfair and inequitable. The priority for selling
farmland held in government inventory to the previous owners, their family,
another family-sized farm, or a minority farmer is eliminated. The only
exception is a 60-day window for purchases of government land by beginning
farmers. Farmland in states with the weakest state laws will once again
be the most susceptible to development pressures, leading to questionable
economic and environmental use of the land.
With the passage of this legislation, the 104th Congress has taken steps
to obliterate the social and economic compact America has maintained with
its farm families for nearly 60 years. Of course, the 1995-96 farm bill
is by no means the first step in the relentless industrialization of American
agriculture. Think of it as more of a nail in the coffin of the traditional
The nation's farm families were well acquainted with "downsizing"
long before it was a buzzword. Hundreds of thousands of them have been downsized
right out of farming in the past 15 years alone as the agribusiness corporations
have consolidated their power and their grip on the U S. food supply. Others
are now forced to operate under onerous contracts by major food processing
industries such as those prevalent in the poultry industry [see Editorial,
page 2] and spreading to other commodities. This "model," while
unfair, will appear deceptively more attractive to bankers and others, compared
with the instability in the illusory "free market."
While NFFC promotes access to direct and guaranteed loans from USDA to help
farmers finance their farming operations, we have vocally expressed our
opposition to the USDA policy of promoting guaranteed loans to help cushion
the risk of unrealistic and unfair contracts. It is a disservice to taxpayers
and individual farmers who lose all of their investment, their livelihood
and their future financial viability while the vertical integrators - such
as ConAgra, Perdue, or Tysons - are protected by both government guarantees
and the farmer's savings and secured collateral.
Amidst hundreds of pages of legislation that negatively impacts the future
for family farmers, there are a few new programs that are important. A small
yet significant step forward is the passage of the Community Food Security
Act. This program provides for a total of $16 million over seven years,
starting this year with $1 million, increasing to $2.5 million for each
of the next six years. These funds will provide short-term grants to non-profit
organizations for projects that help address community food security needs
by increasing access to food by low-income consumers. NPFC strongly supports
this concept and the opportunity to improve the links between low-income
consumers and farmers.
A Fund for Rural America was created at $100 million per year to provide
additional funds for important USDA programs that have been consistently
underfunded. These funds will be divided between research and rural development.
The Minority Outreach and Education Program may receive additional money
through this fund. Last year it received $1 million, a cut of two-thirds
from previous years.
Despite the poor farm economy, with prices consistently driven below the
cost of production, many farmers have remained in their rural communities,
struggling to make ends meet by working off the farm. They commute long
distances and unfortunately compete for limited jobs within a tight job
market. This disrupts both the rural community and individual family in
the struggle to survive while food companies continue to maximize their
profits at the expense of both farmers and consumers.
Those same corporations are the big winners in the Congress they have bought
with the spoils of past victories. Farmers are the immediate losers in this
zero-sum game. All of us - citizens, consumers and taxpayers - are the eventual
The National Family Farm Coalition is a membership organization of family
farm and rural advocacy organizations that work together to promote changes
in farm and food policy to benefit family farmers and rural communities.
Larry Swartz, president of the coalition, is a Kentucky farmer and member
of the Community Farm Alliance. Katherine Ozer is director of the coalition.