Alan Guebert is an Illinois farm journalist.
Although the United States general election will not be held until November, the race by politicians for the hearts, minds and wallets of America’s farmers already is roaring at full speed. The chief fuel? Money. Big, big money.
After spending $22.7 billion (U.S.) of taxpayer money to support U.S. farmers in 1999, the federal ante is already up to $17 billion this year. And neither Congress nor farmer-loving presidential candidates have even begun to focus on how bad the U.S. ag economy will be in 2000.
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The U.S. Department of Agriculture has, however, and its view is that 2000 will be just as profitless as 1999. Indeed, in releasing its 2000 baselines – estimates for crop production and prices -the USDA confessed this year will be worse for farmers than last.
For instance, the new baseline shows USDA expects a record 75 million acres of soybeans to be planted in 2000, an increase of 1.8 million over 1999. The additional plantings, it guesses, will cause soy prices to fall to an average $4.25 per bushel, or 50 cents under last year’s sickly price.
The outlook for corn shows no improvement, either: planted acreage about the same as last year’s 77 million acres; season average price of $1.85 per bu., five measly cents more than 1999.
Likewise the wheat baseline mirrors 1999: 62 million acres; $2.50 per bu. season average price.
If those forecasts are accurate, one can almost bet the farm that Congress will be under heavy pressure to come to farmers’ aid for the third consecutive year. The two previous bailouts, in 1998 and 1999, totaled a combined $15 billion.
The Clinton administration, through secretary of agriculture Dan Glickman, already has played the first card in this game. On Feb. 3, Glickman asked Congress to add $5.6 billion to this year’s USDA budget for additional farmer payments described as “counter-cyclical aid to help farmers through times of low prices.”
Then Glickman raised the bar even higher. He asked that Congress budget another $5.6 billion of “counter-cyclical” farm aid for next year, too.
In December 1999, USDA estimated direct government payments to farmers in 2000 would be $17.19 billion. That breaks out to $4.9 billion for “transition payments” under the 1996 Farm Bill, $7.86 billion for loan deficiency payments, $1.95 billion for the land-idling Conservation Reserve Program, and $2.43 billion in “emergency assistance.”
Glickman raised the latter figure by more than $3 billion in his Feb. 3 request. As such, total USDA aid, appropriated and requested, now tops $20 billion.
Critics of Freedom to Farm quickly characterized the additional money as “window-dressing” which does nothing to address Freedom to Farm’s fundamental flaws. Many want a complete re-write of U.S. farm policy this year.
Political handicappers say that will not happen. Freedom to Farm, while it may not have worked well, is due to expire in two years and Congress does not have the stomach or the time to tackle.
Most Republicans are sticking to the party line that sold Freedom to Farm in the first place: cheap grain will boost exports and the extra exports will deliver higher prices to U.S. farmers.
Trouble is, American ag exports are not increasing. In fact, total U.S. ag exports in 1999 amounted to nearly $46 billion, seven percent under 1998.
Net farm income nationwide fell again in 1999, to $48 billion, and it is forecast to fall another $7.6 billion in 2000. That plunge has farmers wondering how long they can hold out until the magic export bullet slays poor prices.
And it has Congress wondering how much it will cost taxpayers. The safest bet? A lot more. More than last year’s record $22.7 billion.
