Johanns makes case for overhauling farm bill

Jan 23, 2007 2:35 PM

By Forrest Laws Farm Press Editorial Staff

Agriculture Secretary Mike Johanns has made no secret that he thinks Congress should write a new farm bill when the House and Senate agriculture committees get down to the task later this year.

So it wasn’t much of a surprise when Johanns took his case for overhauling the current law to members of the American Farm Bureau Federation and the National Cotton Council, both of which are on record as favoring an extension, in back-to-back speeches to the groups Jan. 8 and Jan. 10.

For openers, Johanns said the setting for the 2007 or 2008 farm bill is totally different than that for the Farm Security and Rural Investment Act that President Bush signed into law in May 2002. "I will be the first to argue that the 2002 farm bill was good policy for its time," Johanns said at the Farm Bureau annual meeting in Salt Lake City. "But the agricultural and economic realities that influenced the development of the 2002 farm bill simply don't exist today."

In 2001, he said, agricultural exports had declined for five straight years and were down to $50 billion a year. Since then, exports have risen to a record $68.7 billion (in 2006) and are expected to reach $77 billion in 2007. Farm cash receipts, meanwhile, have been climbing and are expected to hit $242 billion in 2006 — $41 billion more than in 2001.

"Clearly, we're seeing a much stronger agricultural industry than we saw five years ago," Johanns said. "Interestingly enough, in fiscal year 2000, we provided the highest subsidy payments on record: $32 billion, and yet the farm economy was far, far from impressive."

"The 2002 farm bill was written for an industry that was far different than that of today. We’ve had both good yields and strong prices, which have created an increase in revenue. The increase in exports has had a positive impact because we’re taking advantage of greater international demand for the products you raise."

He acknowledged that farm groups have expressed concern about the lower baseline for farm programs — a product of the savings from the 2002 farm bill. "If you just simply extend the current farm bill, you have a situation where you simply won’t have as much money compared to 2002," he noted.
And specialty crop producers, who have not received farm program payments, are saying they want help in the next farm bill.

"Now I didn’t have a single one of those farmers come in and ask for a cash subsidy," he told reporters at the Beltwide. "But they did ask for increased funding for conservation, research, market promotion, phytosanitary/sanitary issues and border issues."

Johanns said he believes it's possible to write a farm bill that will withstand WTO challenges like Brazil successfully brought against the U.S. cotton program in 2004 and 2005.

"There are many ways to support agriculture," he noted. "Under WTO rules, direct payments, for example, are not considered market-distorting. In general, if you tie your program to price or production; i.e., you get paid more with more production or if a program kicks in because of a certain price, you’re likely to have a bull's-eye on your back relative to WTO."

USDA's farm bill proposals, which he said are about "a month away," will attempt to address such issues while continuing to provide support for American farmers.

"I believe in supporting agriculture," he told reporters attending the Beltwide. "I think how you do it is a very critical issue. You can support farmers, but you have to do it in a way that provides for a safety net that is beyond challenge."

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