The Nebraska Farmers Union (NEFU) said the proposed agriculture funding agreement reached by the House and Senate conferees for federal farm programs for years 2002 to 2011 contained good news and bad news for family farmers.
Lee Swenson , president of National Farmers Union (NFU), explained part of the good news. "We are pleased that Congress recognizes the need for additional farm program funding," Swenson said.
NEFU President John K Hansen further explained the good news. "They increased the baseline spending tied to commodity programs from $7.27 billion per year by adding an additional $7.35 billion per year in the 2002 to 2011 budget resolution. The budget resolution would raise the baseline spending from $7.27 billion per year to $14..62 billion per year for ag commodity programs," Hansen said.
"Unfortunately," Hansen explained, "while the increased baseline spending for the ag commodity section of federal farm programs is raised to $14.62 billion per year, that level of spending still is far below the $22.49 billion Congress spent last year on the same programs. We need to remember that the 1996 farm bill stripped all the farmgate price impacting tools out of the farm policy tool box and, as a result, farm commodity prices have collapsed," Hansen said.
Hansen went on to say, "The average national market price of corn is down 32%, soybeans down 35% and wheat down 38%. That is a manmade economic disaster for farmers. In addition to collapsing farmgate commodity prices, the cost of farm inputs has risen dramatically, reflecting skyrocketing energy costs. Many of our family farmers can no longer absorb the double whammy of collapsing ag commodity prices and skyrocketing operating costs and, as a direct result of the 1996 farm bill, are being forced out of business. The status quo is not acceptable. We must make substantial improvements in farm income," Hansen said.
Farmers Union found more bad news in the ag budget agreement for years 2001 and 2002. The family farmer-and-rancher organization expressed major concern that the additional $5.5 billion for 2001 is not enough to address the farm income crunch farmers are currently facing. The proposed funding is far short of the $9 billion that Farmers Union, along with other agriculture organizations, had identified as the minimum level needed to address this year's needs in agriculture.
"We are disappointed that emergency funding in this agreement is little more than half of the previous commitment, when today's problems facing farmers and ranchers are worse," said Swenson.
In 2001, farmers and ranchers face the fourth consecutive year of below the cost of production commodity prices. This year, farmers are estimated to absorb an additional $2 million in energy related farm operating costs for farm inputs, including fuel, fertilizer, irrigation pumping, grain drying, trucking and milking facilities.
"The new proposed budget guidelines mean that Congress must rethink its approach to farm programs. Congress must focus on how to structure farm programs, so that spending fits into the new budget guidelines while dramatically raising domestic ag commodity prices. If Congress does not raise farmgate value, they cannot meet the grow-ing crisis of farm income and related challenges we face in rural America," Hansen added. "Farmers Union will work aggressively with members of Congress to craft a farm bill that improves market prices for commodities, which will decrease the need for direct government assistance. We need to make sure, in addition to improved commodity prices, the farm bill also addresses the needs of rural development and conservation," Hansen concluded.