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 country.

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 practices.

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 family farm.

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 losers.

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.