Farm Safety Net: Time to Reform Commodity Programs

By Bob Gronski on February 28, 2018

Ethical Food and Agriculture

What should the priorities be in the next Farm Bill?

The overarching goals should be to advance opportunities and create a better future for family farms. This means:

– A thriving next generation of farmers and ranchers.
– Healthy communities with strong local food connections.
– Conservation stewardship that sustains our shared natural resources.
– A fair and effective farm safety net.

Are the U.S. Catholic Bishops speaking out?

Yes, at this year’s Catholic Social Ministry Gathering (February 3-6 in Washington, DC), the USCCB Office of Domestic Social Development clearly stated the importance of a social safety net that included access to healthy and affordable food.

The USCCB, along with Catholic Rural Life and other Catholic organizations, sent a joint letter during that same week to Congress identifying priorities for the 2018 Farm Bill. Their letter stated:

American policies should provide for poor and hungry people here and abroad, offer effective support for those who grow our food, ensure fairness to family farmers and ranchers while building up rural communities, and promote good stewardship of the land.

It is vital to remember, they said, that it is the labor of farmers which “helps the earth ‘to yield its fruits’ for the benefit of us all.”

Do commodity subsidies need reform?

This week we focus on Title I: Commodity programs and subsidies to farmers.

The Commodity Title was established to provide a safety net for farmers. Various kinds of subsidies are currently available to help commodity producers (corn, soybeans, wheat, rice, etc.) manage their risks, both for price fluctuations and bad weather. It is important to continue a reasonable amount of support for these producers. Dairy farmers also need price supports.

Given federal budget constraints, risk management subsidies should be targeted to small and moderate-sized farms. Government resources should assist those who truly need assistance.

What are the current policies of the USDA?

The U.S. Department of Agriculture (USDA) recently shared their preferred policies for the next Farm Bill. Although Congress writes the Farm Bill, the USDA can provide counsel to Congress, especially in the crafting of the Farm Bill. Their principles for farm production policies are:

– Provide a farm safety net that helps American farmers weather times of economic stress without distorting markets.
– Promote a variety of innovative crop insurance products and changes, enabling farmers to make sound production decisions and to manage operational risk.
– Encourage entry into farming through increased access to land and capital for young, beginning, veteran and under-represented farmers.

All these we can agree to in general; the actual programs and rule-making provisions to carry out these policies will need to be scrutinized to ensure the viability of family farms. The USDA’s stated principles on conservation are encouraging:

– Ensure that voluntary conservation programs balance farm productivity with conservation benefits so the most fertile and productive lands remain in production while land retired for conservation purposes favor more environmentally sensitive acres.
– Support conservation programs that ensure cost-effective financial assistance for improved soil health, water and air quality and other natural resource benefits.

So what do we need to keep our eyes on? What needs to be fixed?

Offering a measure of protection against wide price swings and market declines in basic food commodities is a legitimate function of government. The resulting safety net, however, should be just that—a safety net, not a subsidy system that encourages land price inflation, soil depleting farming practices and systems, farm consolidation, and declining farming opportunities.

The current subsidy system can be seen as broken. The Commodity Title of the Farm Bill needs to be fixed to bring it in line with the goals of fostering new economic opportunities in agriculture, conserving natural resources and protecting the environment, and improving prospects for the whole of agriculture.

The 2018 Farm Bill should modernize the farm safety net by legislating strong and loophole-free payment limitations. Small and mid-sized farmers would have no problem with that, and money would not go into the hands of those who do not need it.

Next week: What about Crop Insurance subsidies?

Besides Commodity Title payments, farm operations can also receive subsidies for another risk management feature: crop insurance. Next week we will explain this program of the Farm Bill and why a number of reforms are necessary, such as:

– Expanding crop insurance access to better serve all types of farmers in all regions of the country.
– Promoting conservation by eliminating insurance program barriers to sustainable farming practices.
– Improving crop insurance delivery to make the program more transparent and efficient.

Stay tuned!

Robert Gronski is a Consultant for Catholic Rural Life. He tracks policy perspectives on food, farm, environmental, and rural community issues and helps frame these within the perspective of Catholic Social Teaching.

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