Subsidies, Savings Accounts and Small Farmers
June 26, 2007 | Posted by Scott Faber in Uncategorized
The Ruminant was suprised to see the Heifer, a heritage breed, place a cow pie squarely on top of FARM 21, a proposal to make a transition from farm subsidies that largely flow to large producers of five row crops to a system of risk management accounts.
In particular, the Heifer argued that FARM 21 would favor large farmers in two ways: by allowing large producers to put unlimited funds in their risk management accounts, and by taxing farmers more when they withdraw funds.
In fact, the FARM 21 proposal developed by Indiana farmer Richard Lugar (R-IA) would not require farmer contributions to risk management accounts but would allow farmers to contribute some of their own funds.
However, Lugar's proposal would limit farmer contributions to $10,000 a year. A House companion would limit contributions to $8,000 a year — or the amount the Ruminant can contribute to his IRA.
What's more, account withdrawals during years when sales fall would be taxed at a lower rate than they would during the good years — the sort of income averaging those crazy Australians have been doing in lieu of subsidizing their farmers.
The Ruminant thinks a transition to risk management accounts could help small farmers in several ways.
One, FARM 21 would reduce and restructure subsidies that disproportionately flow to large farmers, allowing them to buy out their smaller neighbors. The largest 10 percent of subsidy recipients collected about two-thirds of all farm subsidies between 1995 and 2005. While some large farmers collected more than $1 million, many subsidized farmers collected less than $1,000. Rising land costs — driven in part by direct payments linked to production history — may be the biggest threat to small farmers.
Two, restructing our safety net would help pay for increases in conservation, nutrition, rural development, renewable energy and other initiatives that help all farmers, regardless of size. For example, FARM 21 would boost funds to expand direct markets between farmers and consumers (which allows the farmer to keep more of the food dollar), increase programs to help farmers develop new products and new markets, and boost popular conservation programs.
The Heifer is rightly concerned that FARM 21 would not provide as much funding as he would like for some programs and no funding for others, such as the Conservation Security Program (CSP). The Ruminant shares his concern. But, regardless of what you might think about FARM 21, Lugar's proposal shows just how hard it will be to meet many urgent priorities with the funds that are currently in the trough.
Even the reductions in farm subsidies proposed in FARM 21 — divided among conservation, nutrition, energy, and rural development initiatives — don't provide nearly enough funding to meet America's urgent energy, environmental, hunger and health challenges. Like the Heifer, the Ruminant supports payments limits. But, even the effective payments limits proposed by Senators Dorgan and Grassley, which the Ruminant supports, won't generate more than $200 million in annual savings.
Here's hoping experts like the Heifer and other members of the herd will find creative ways to help pay for urgent priorities like CSP and leave the cow pies in the pasture.
3 Responses
Comment from Beltway
June 27th, 2007 at 2:09 am
I think the most important thing is to advocate from a set of values. And I think that any organization should stand firm in defense of its values, regardless of political champion
And I think those values should be reflected in concrete and defensible policy recommendations. I also think that making those recommendations public -prominently- is critical. Far too much of the legislative negotiating in Washington, DC occurs behind closed doors, depriving citizens of their legitimate right to be aware of the policy process, and perhaps more importantly, their ability to advocate effectively.
As I look through the policy options on your website (A Dozen Fresh Ideas) I see much that raises questions. I consider myself fairly knowledgeable about farm programs, so I am interested in hearing about specifics of Environmental Defense's positions. Feel free to include excessive detail.
Right out of the blog post, you mention that the "heifer" should spend his time finding creative ways to find new funding. Earlier in the post you say that even FARM 21 does not provide the savings you think necessary. What are your creative ways to find the rest of the money to fund "America’s urgent energy, environmental, hunger and health challenges"? How much money is needed, exactly?
You mention above that you support payment limits, but I don't see that in any of your 12 ideas. Does Environmental Defense endorse the Dorgan-Grassley payment limits bill in the Senate?
It is also mentioned that you support payment limits on conservation programs. Surely anyone who supports conservation program payment limits would like to reduce the current $450,000 limit on the Environmental Quality Incentives Program, by far the highest limit on any conservation program today. What specific dollar limit on EQIP does Environmental Defense support?
You support increased funding for CSP. How much money do you want to put in CSP, and why have you not criticized Ron Kind for ignoring CSP?
You support increased investment in renewable energy. Exactly how much money do you want to invest in renewable energy and do you want to have that investment tied to ensuring the highest possible level of local economic impact?
What do you think is a reasonable price range for a ton of carbon under a cap and trade program? How much money should be available to farmers for technical assistance under a cap and trade program, and what form would that program take?
How much money do you want for an organic transition program?
Do you support a ban on meatpacker ownership of livestock, which could decrease producers' economic dependence on the government?
To support local and health foods, how much money does Environmental Defense want? What programs do they want funded, or what new programs would they like created?
I would love to have responses to these questions posted on the blog. I understand that most organizations do not and cannot have a perfectly developed position on every issue, so if that is the case on some of my questions please just say so and I'll understand. Failing a blog response, I suppose you could email me- sideshow1979 (at) hotmail (dot) com
I've been to the Sustainable Agriculture Coalition website and have read a 60 page paper that presents their preferred policy options, complete with dollar amounts and program names. If Environmental Defense has such a paper, I would love to read it.
Everyone should be willing to honestly defend our concepts, ideas, and policy options, whether we are politicians or advocacy organizations. And where we make compromises, we should say so publicly. The general public is intelligent enough to realize there is a difference between perfect policy and what comes out of the political process. In the end, such principles result in better public policy, and better policy outcomes.
Comment from Scott Faber
June 27th, 2007 at 5:18 am
First, I have screened this blog for (failed, apparently) attempts at humor. My apolgies to the Heifer and others who mistook light-hearted humor for mudslinging.
Second, the Ruminant strongly supports payment limits, CSP, organic transition and research, a fair price for carbon offsets, farm-to-school initiatives, the farmer's market promotion program, new farmer programs, value-added grants, contract reform, community food grants, apple pie, and motherhood. We also support the designated hitter. In fact, we may be (checking — WE ARE!!) one of the few national environmental groups that has weighed in on behalf of many of these issues. We haved not endorsed the packer ban yet. I'd like to think we deserve a an A-, but I suspect this may be a pass-fail test.
All of these — and many, many, many other — programs reflect our core values: that farm and food policies should help many more farmers and communities, reward stewardship, provide healthy and affordable food choices, and boost the production of renewable energy. That's why we have supported legislation that boosts many of these programs, including legislation introduced by Reps. Blumenauer, Kind, Cardoza, DeLauro, Baca, and Van Hollen and Sens. Menendez and Brown. We are pleased that 220 members of the House have co-sponsored bills that expand these important programs and imagine that will matter more to Congress than a paper by a bunch of pointy-headed enviros. You can view these bills on our web site.
We can't speak for Rep. Kind, but we like to note that Mr. Kind was the only House member to introduce a bill that lifts the cap on CSP. His bill also includes many other recommendations of SAC and CFSC.
Comment from Eric
September 22nd, 2007 at 5:23 am
This is exactly what I expected to find out after reading the title Subsidies, Savings Accounts and Small Farmers – Environmental Defense. Thanks for informative article
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