Will farmers plant without a subsidy?

The U.S. government has convinced farmers for 80 years that, if they grow a large crop, they will be okay. Numerically, there is no truth to the claim, as farmer numbers have declined during the entire period. Yet the belief remains, along with the farmer's seemingly unquenchable thirst to plow and plant. In an age of larger, more sophisticated agricultural producers and a tighter and tighter federal budget, will we see an end to production-linked subsidization and will farmers resist their primal urges?

Farm programs have taken many forms through the last half of the 20th century, but we've never had a voluntary, unpaid acreage reduction of any consequence. We've had such a large surplus and low prices that the government has instituted acreage reduction programs to give farmers incentives not to plant, usually with limited success in reducing the overall harvest. In 1983, farmers were given grain (payment in kind) if they set aside a percentage of their acres. There was also a drought and made it look like Ronald Reagan was a genius for one year. The 1996 farm bill was written when demand was larger than supply and prices were very profitable. That set up a revolutionary pathway to virtually eliminate production subsidies by 2002, but changing fortunes for farmers caused even the most market oriented to crawl to Washington and beg for increased support in the late 1990s. The current farm bill again pays for large production and has virtually no cap on payments that a good farmer can't get around. In terms of what the government and farmers want to accomplish, this may be the best farm bill ever written.

However, we now stand at the beginning of a new century with a new set of criteria to consider as all influencers come together to create the framework of legislation that includes compliance with World Trade Organization subsidy rules, uses for taxpayer revenue that rank higher than farm payments and the increasingly valid question: "Must we pay farmers to plant the desired crops?"

It has always been the threat to stop planting crops to cause prices to rise and make the consumer realize how important farmers are to their daily lives. The history of the Grange in the late 19th century, records Mary Elizabeth Lease of Kansas, one of the nation's first female attorneys, traveling to Grange halls and urging the farmers to "raise less corn and more hell! But farmers have been their own worst enemies as they have continued to plant every available acre and utilize technology to produce more bushels every year.

Farmers claim to be victims who have to plant "to insure the smallest loss" on their acreage. The government has paid farmers not to plant with only limited success as the worst acres are set aside and more fertilizer is used on the remaining fields. The conservation reserve, that now pays farmers to keep permanent cover on over 30 million acres, has not appreciably affected the trend line on total yield of major crops.

Many farmers will admit that without government subsidies they would lose money, but when asked if they'd leave a field unplanted if the subsidy was withdrawn, they have a blank stare and show an unbelieving demeanor suggesting that such will never happen.

Dr. Barry Flinchbaugh, Kansas State University professor of agricultural economics and long-time farm policy influencer, said in an interview with me last week, "The next farm bill will be the beginning of the end of market-distorting payments to farmers. He added that the 1996 farm bill, known affectionately as "Freedom of Farm" was the first attempt to stop paying farmers to produce.

It's going to take a lot of the fun out of farming the land and farming the government if the 2008 bill redirects payments for conservation, energy, rural development and other items. Just the farmer and his field, do as you will, reap what you sow.

Economically, a cessation of countercyclical payments is sound. The government knows how much money it's going to spend up front, and the funds go to publicly endorsed programs that are good for all Americans. Politically, the issue becomes much more delicate. Can the party in power endorse a farm program that denies production linked payments to farmers and still keeps their votes?

Farmers traditionally vote for the last guy who gave them money. Farmers don't forget the real or perceived damage done by an administration that embargoes their exports or slashes their income. If production subsidies end, no politician in farm states will be safe for several election cycles. However, in 2007, the republicans may bet that the true farm vote is small and the farmer has no where else to go because the abyss between parties has become so large on social and moral issues, that the risk may be worth taking.

At this point, the administration is offering to trade subsidy payments for market access. If the Europeans agree to cut their payments and open their markets, the Bush administration is going to lobby for all payments to go into "non-distorting" programs. This strategy may still bring dollars a farmer whether he plants corn or alfalfa or clover. It may also give traditional crops a chance to be sold into international markets that have been protected.

Psychologically, can a farmer stand at the edge of a field that has grown a crop every year of his life and say that because of the cessation of government payments, he will now plant a perennial cover crop, build ponds and be at peace with nature? Will he actually require a profit before planting? Time will tell us whether the offer will be made and whether the contract will be accepted.

Editor's note: Ken Root is a farm anchor at WHO Radio in Des Moines, Iowa. He is a 28-year veteran of agricultural broadcasting and writing. He can be reached by e-mail at: kenroot@clearchannel.com or by writing to him at the Journal at P.O. Box 760, Dodge City, KS 67801.

Date:1/26/06