Case Overview, Farm Bill

 

          One of the realities of farming is that much of what leads to success or failure is out of one's control. The weather and the level of worldwide crop production in any one year can make all the difference between making a profit and suffering a catastrophic loss. Farmers cannot move nimbly, quickly adapting to changing market conditions. Since they're only paid when the crops mature and are purchased by a broker or food producer, farmers often carry hefty loans to see them through the year. All of this is a prescription for insecurity and vulnerability.

          The primary public policy tool to help farmers so they are not wiped out by a bad weather year, high interest rates, or a bumper crop that drives prices down, has been commodity price supports. Over the years the Department of Agriculture has set parity prices for commodities designated by Congress. This approach has included wheat, cotton, corn, peanuts, milk, and other agriculture products. The parity price is an income floor to provide for what the government determines to be a reasonable return on investment. If the price for wheat, for example, drops below the parity price, the government steps in and pays the difference to the individual farmer. The rationale for parity support is that it is in the public interest to keep food prices relatively stable and to protect farmers who provide such a valuable service to us all.

          Over time the parity programs became increasingly discredited. As more and more countries have developed their agricultural sector, the U.S. price for certain commodities has moved above the international market price. One lobbyist complained, "Sugar sells for 5 cents a pound in Canada and in Europe and in this country it costs about 28 cents." Parity is a subsidy and in strict market terms subsidies are inefficient. A second reason parity programs have lost support is that increasingly farming is being taken over by large corporations and the family farm is disappearing. Sympathy for the salt-of-the-earth farm family does not extend to farm factories raising and slaughtering hundreds of thousands of pigs a year at a single (and very smelly) site.

          In 1996 Congress passed the Freedom to Farm Act, which gradually phased out parity programs over the next seven years. Looking back at the law a farm lobbyist said bluntly, "It failed miserably to achieve the goals it was designed for." In exchange for the loss of price supports farmers were given broader freedoms in terms of acreage allotments and other regulatory relief. But small farmers couldn't cope financially with the gradual decline in prices and Congress began work on legislation in the 107th Congress to put back in adequate price supports.

          The general strategy for getting this bill through-a bill encompassing a program that was generally unpopular and makes groceries more expensive to consumers-was to load the bill up with policies benefiting lots of different constituencies. Different crops are grown in different parts of the country, so the parochialism of individual representatives and senators worked to the advantage of the legislation as different benefits were put in for different commodities. But many more constituencies had a stake in the bill too. Said one observer, "It covers a lot more than the farm programs, all of our nation's nutrition programs are reauthorized, humanitarian assistance; you have trade, rural development, conservation, [and the] environment." Subsections of the bill dealt with topics ranging from non-traditional crop production, to animal welfare, to New England barn restoration - resulting in a prodigious breadth of interest group involvement. With all these important constituencies connected to the bill, the House and the Senate easily passed the omnibus legislation in 2002.