Ag Depression: Where are the Answers?

My respected colleague and insightful farm columnist Alan Guebert recently observed regarding the current farm crisis that "most politicians -- whom rural America trusted with its votes -- dawdle. As the calamity built throughout June and July, the dawdlers claimed they couldn't act until they saw for themselves just how bad it was."

In essence, Guebert continues, the politicians didn't trust farmers for the facts; they needed eyewitness proof. "Good thing," he adds, "the fire department doesn't operate like Congress.

"To gather proof, senators and representatives spent the August recess shaking hands, riding in parade convertibles and talking to the same farmers and agri-biz folks they've consulted since they passed Freedom to Farm in 1996. Little wonder the old problems linger and the 'new' solutions are as stale as last week's bread," he adds.

Judging by the Year 2000 presidential candidates rhetoric to date they could well be included in Guebert's analysis for all of them -- save one -- has either demonstrated a piecemeal approach to the current crisis facing the nation's family farmers or they have resorted to the age-old political device of throwing good taxpayer money down the bad farm policy sinkhole.

Republican Steve Forbes, for example, has called for the United States to push for the elimination of the International Monetary Fund, in part to help farmers. Forbes claims the fund urges developing countries to devalue their money to increase trade. U. S. Sen. John McCain, R-Arizona, told an Iowa audience during an April visit to the state that he continues to oppose tax breaks for ethanol. "I understand how difficult my position will be for some on ethanol subsidies," McCain told a meeting of Des Moines Register reporters and editors. "... I cannot support it. I've never supported subsidies of this kind, and I never will."

Texas Gov. George W. Bush promises to "play hardball" with European countries that restrict U.S. farm imports. "To foreign governments, the next president must also carry a simple and unequivocal message: We will no longer tolerate favoritism and unfair subsidies for your national industries," the Republican presidential candidate told supporters in Iowa. "We want to compete and compete on level ground."

"As president, I will have strong relations with the European Union," said Bush. "But I will not stand for unfair trade barriers, and that is what these objections to our biotech crops really are. They are trade barriers pure and simple -- unfounded in science, unjustified in law and unfair in practice."

Bush believes that the 1996 Freedom to Farm Act "brought a lot of changes into the lives of farmers. In the long term, it promises much good as farmers rely less on government control of supply and more on market demand. But this is today, not the long term, and we owe it to farmers to see them through the transition."

He also has called for changes to the crop insurance system; tax reform, including repeal of inheritance taxes; property-rights protections for farmers; continued tax breaks for ethanol; fast-track trade authority to allow the president to make quicker trade deals with other countries, and bringing China into the World Trade Organization.

Former U.S. Sen. Bill Bradley, a New Jersey Democrat, believes that regulating large livestock confinements is a federal issue because the federal government has an interest in protecting the environment and in protecting small producers from big livestock farms via antitrust laws.

Bradley also has said he would work "to get money now" to farmers by extending loans and delaying interest payments. He also explained his unique way for dying family farms to compete with big corporate farms: Create a "family farm" label for an upscale market, he elaborated, kind of like the market for Starbucks coffee, that would sell products at high-end grocers.

Meanwhile, Democratic Party candidate Vice President Al Gore, has expressed the belief that current farm crisis is now starting to hurt blue-collar workers in farm-equipment manufacturing, such as Deere & Co. "The nation's economy is in the best shape it's ever been in, but for those who have been left behind, we need to use this election to figure out how we can build on our prosperity, keep it going, but make sure those who have not participated in it are brought fully into the American dream," Gore said.

"We need to fix the farm crisis. We need to change the Freedom to Farm law and have some amendments to help farmers with some new approaches that will get rid of this nonsense approach that's been such a disaster," he said.

The current farm crisis, according to Gore, "may be a quieter crisis than the one in the '80s, but for many it's a deeper crisis. The levels of despair many farmers are encountered are worse than anything since the '30s."

He said the government should launch anti-trust probes of supplier and packer concentration and has called for meat packers to report all the prices they pay for livestock and poultry. "We need to improve the accuracy of our livestock reporting system so family farmers and ranchers can compete on a level playing field," Gore believes.

The Vice President also thinks there should be more on-farm storage of grain. On trade agreements, Gore favors "opening up new markets for our products in a fair way that emphasizes the breaking down of barriers in other counties and integrates the concerns of labor and the environment into the negotiating process."

Among all the current presidential contenders, however, the one candidate who has articulated like none of his opponents a truly genuine populist approach to the crisis now facing family farm agriculture in the U.S. is none other than Patrick J. Buchanan. In a speech given to the Principal Group, in Des Moines, Iowa on August 9, 1999, Buchanan offered his "A Farmer's Bill of Rights" which is well worth quoting from at length.

"For many Americans, these are the best of times. Unemployment and interest rates are low, prices are stable, and on Wall Street the bulls have been running wild. But not everyone is marching in the great parade of American prosperity.

"Look past those brimming silos and fields of corn, and you'll see a harvest of heartache in the heartland of America. Those silos store last year's crop that was packed in because prices were too low to turn a profit. As for those full fields, some of that crop may rot on the ground because farmers can't afford to harvest it.

"This year, the price of cotton is down 46%; wheat prices are off 61%. Corn has reached the lowest price in two decades, and soybeans that sold for $8 a bushel three years ago bring just $3.50.

"The specter of depression haunts the farmlands of America. But this crisis is different. It has struck Iowa when the growing conditions are good and farmers anticipate a record soybean harvest and the third greatest corn crop ever. The problem is price.

"The Asian economic disaster that spread to Russia and Latin America sent foreign demand for U.S. farm products crashing 40%. Desperate to off load their own subsidized oversupply, countries began dumping into the U.S. market. Invoking the Global Economy, Mr. Clinton refused to take action. America's farmers are paying the price, as are implement companies and hardware stores, coffee shops and car dealerships across the great American breadbasket.

"Washington and Wall Street may believe it inevitable that the family farm must pass away. But, as a conservative, I believe that family farms and rural towns must be conserved. So, today, I offer this ten-point pact, a Bill of Rights for the Family Farm:

"First, I will, as President, abolish all inheritance and capital gains taxes on family farms. Americans over the age of 55 own half of our farmland. But inheritance taxes prevent these farmers from bequeathing a birthright to their children. . ..

"Second, we must repeal NAFTA. Since NAFTA passed, U.S. agriculture imports from Canada and Mexico have increased 57%, and our agriculture trade surplus with the two countries has shrunk by two-thirds. . . .

"If prices remain at these levels for any extended period of time, every family farm in this country will face bankruptcy and ruin. Therefore, as President, I would impose this policy: Whenever the price of a commodity falls below the cost of production, we stop importing that commodity into the United States, to save our family farms. It is time Republicans and Democrats both put the American economy before the Global Economy and America's farmers ahead of the claims of any and all foreign regimes.

"Third, I will abolish the IMF and end these taxpayer bailouts of foreign competitors of U.S. farmers. Twenty years ago, we produced 70% of the world's soybeans, Brazil 5%. Today, our share has fallen to 47%, Brazil's has risen to 20%. And Brazil has lately cleared 150 million new acres for soybean production. Yet, in 1998, the U.S. led a $41 IMF bailout of Brazil, which then devalued its currency by 40%, giving Brazilian farms a new 40% price advantage over Iowa farmers. ...

"Fourth, I will stop using food as a weapon, and review all existing embargoes and sanctions of foreign countries. The denial of food does not hurt dictators; it hurts their subject peoples and American farmers, while our faithless allies rush in to fill the orders.

"Fifth, I will enforce existing anti-trust laws to prevent the mega-mergers that are forcing vertical integration of American agriculture. In 1921, the Packers and Stockyards Act was passed in response to near 50% consolidation of the U.S. meatpacking industry by five packers. Today, five corporations control 89% of all beef processing. ... Family farms cannot compete against transnationals that fix prices by closed contracts, leverage trade deals, secure tax benefits that are unavailable to independent producers, and operate branches of their empires at a loss until small competitors collapse. ...

"Sixth, just as resisting consolidation will encourage fairer competition, so, too, will requiring price disclosure. Last year, when pork producers were getting eight cents a pound -- $20 for a hog that cost $75 to raise, IBP, the country's second largest pork processor, reported quadrupled earnings in the fourth quarter, and Hormel Foods enjoyed the most profitable year in its 107-year history. ...

"Seventh, just as I support the independence of the family farm, I support a policy of U.S. energy independence that includes a strong stand for ethanol. This industry creates 40,000 jobs, adds $12 billion in net farm income each year, and decreases the demand for foreign OPEC oil. ...

"Eighth, saving the family farm will require a rewrite of the Endangered Species Act so that Congress is forced to vote on every species that is listed as endangered. ...

"Ninth, we should exempt family farms from OSHA and begin a regulatory revolution to restore sanity to federal regulation. I will impose a moratorium on new regulation, require a sunset provision of five years on all regulation, and institute a defined annual cutback in paperwork for family farms.

"Tenth, we must restore farmers' property rights under the Fifth Amendment and end the regulatory theft of property rights without just compensation. ...

"In 1785, Jefferson wrote to John Jay that America's farmers were our 'most vigorous, most independent, most virtuous' citizens, who are 'tied to their country and wedded to its liberty and interests with the most lasting bands.'

"We must keep faith with these Americans, by ensuring that their dreams are not buried beneath dumped imports, or plowed under by transnational corporations with no allegiance to anything but their own bottom line.

"Family farmers are not begging for federal handouts. Proud, hearty stock, they have, for love of the land, weathered droughts, overcome disease, and outlasted depression. They simply want their labor to be valued, their products to be competitive, and their own government to take their side in the global marketplace. America's farmers are asking nothing more. They deserve nothing less."

If so-called liberal Democratic candidates as well as conservative Republican candidates ignore or write off Buchanan's "A Farmer's Bill of Rights" and the strong agrarian populist appeal it certainly will have to farming and rural communities throughout the nation they will do so at their own political peril.

A.V. Krebs is Director of the Corporate Agribusiness Research Project, P.O. Box 2201, Everett, Washington 98203-0201 e-mail:

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