Rethinking Farm Policy: Subsidies, Sprawl, and Globalization

2 October 2006

Author: Erik Kancler

America 's farm policy has many detractors -- conservationists, economists, environmentalists, and yes, even city planners. With preparations for the 2007 Farm Bill underway, Planetizen Correspondent Erik Kancler spoke with American Farmland Trust President Ralph Grossi regarding his hopes for reform.

To date, the overarching legacy of federal farm policy on natural resource and wildlife conservation has been one of unbridled agricultural sprawl. As agricultural subsidies have brought stability and profitability for many farmers, they have also encouraged over-use and consolidation of agricultural lands and the cultivation of practically every arable acre in sight. The result has been the conversion of countless and diverse natural landscapes, from the once endless tallgrass prairie of the Midwest to California's Great Central Valley -- a once Serengeti-like expanse of grasslands, wetlands, and riparian landscapes -- into a sea of corn and soybeans, rice and cotton.

But for the first time, federal farm policy, and at the heart of it, the 2007 Farm Bill, have an opportunity to bring about major reversals of that trend. As a result of growing pressure from developing nations and from other sectors of the U.S. economy, the agricultural industry is beginning to face the reality that it's once-holy commodity subsidies are going to have to be dismantled, or at least substantially reduced, in order to open up free trade opportunities elsewhere.

At the same time, conservationists, environmentalists, hunters, fisherman, and a host of other interest groups have pulled up seats at the table and are demanding that inroads be made towards righting past wrongs, and that small but critical successes of the past two decades be matured into more meaningful long-term solutions. Where farm policy was once the problem, now many of them see it, hopefully, as a solution.

As congressional subcommittees begin to discuss these matters in preparation for drafting the next farm bill, American Farmland Trust President Ralph Grossi spoke with Planetizen's Erik Kancler about the opportunities that lie ahead, and his hopes that the policies of the future will do as much to encourage good stewardship and wildlife restoration as they will to ensure a successful agricultural economy for farmers nationwide.

The following are excerpts from the interview with Ralph Grossi

What I'm interested in is the role that federal farm policy, and in particular the 2007 Farm Bill, can play in encouraging wildlife and natural resource conservation. To date, although some significant precedents have been set, it's commonly argued that progress has been slow.

This time around, however, there seems to be an unprecedented flurry of conservation interests at the table. Will 2007 be a landmark year for finding reform in farm policy?

I would say that you're right, there's an unprecedented number of different interests involved, but it's not just conservation. There's broad support for a different kind of farm bill in 2007. And there are forces converging that should make reform possible, more now than at any time in the last couple of decades. For starters, we're running huge deficits every year. Last time we wrote a farm bill [in 2002] we were actually working with a budget surplus. So there's pressure to keep the cost down and justify why we spend money on farmers and make sure we're getting real value in return.

I think that's fair to say over all sectors of the federal government.

That's true, but the farm bill will be the patient on the table next year. And there's increased transparency in farm policy these days -- we now know where all the money goes and who gets it. The Environmental Working Group and the Washington Post among others have worked to exposed a good deal of waste and even some fraud in the farm subsidy sector. With the budget pressure and the transparency, there's an expectation to do a better job this time around.

And then there's the trade agreements. Developing countries, led by Brazil , have brought suits against the United States , the European Union and others for distorting trade. They've gone to the World Trade Organization and won. So we need to respond to those suits and also the possibility, or rather, the likelihood, that there will be many more suits coming. That puts a lot of pressure on the United States to reform its commodity subsidy programs.

I think another force for change is the increased push to address what could be called “the unmet needs” of agriculture. For example, many of the environmental and conservation programs designed to help farmers address environmental problems are badly under-funded. And there are other contemporary problems like dealing with invasive species that we could be investing in as well. But the money is going into the commodity programs instead.

You put all that together: budget, transparency, trade agreements, and the unmet needs, and you have a powerful set of forces to bring about change next year.

So you're suggesting that dismantling farm subsidies to some degree is the key, and that those subsidies aren't holy ground anymore.

They have been holy ground. But the House Agricultural Subcommittee just held a hearing to look at alternatives to that program. The American Farmland Trust has been working with a professor at Ohio State University , and we've developed a program that would be less costly and much more effective as a safety net than the current programs. There's another one being developed at Iowa State with the help of the National Corn Growers Association. It's a positive sign both that good alternatives are being developed and that the committee has been willing to listen.

What kind of confidence do you have in the nation's leaders to respond to the growing international pressure on subsidies?

I think if you look at long-term trends, globalization is here to stay. And it's not just agriculture, it's a lot of other industries. Agriculture only represents 2% of our foreign trade, so to think that agriculture should drive the agenda is a little silly, but right now it influences it a great deal. But if we want to open up more trade for the drug industry and tech and entertainment industry, we have to remove barriers in other countries, and one of the things those countries are demanding in return is that we reduce our farm subsidies.

And there's pressure not just from other countries, but from within our own country. Other industries are saying agriculture is an impediment to our ability to sell around the world, and they're beginning to bring more pressure on congress and the administration to act.

If subsidy payments are scaled back, will the leftover money stay in agriculture?

There's one community that says that money ought to go back to the Treasury to reduce the deficit. But clearly within agriculture the argument will be that the money should stay in agriculture, and be put into non trade-distorting efforts.

Regardless of where the money goes, wouldn't the loss of subsidies result in the agricultural abandonment of marginal lands?

One would expect that. And I predict there will a big upside for conservation there.

On the other side, overall competition for land is increasing.

Yes, and that debate has been heightened significantly by the emergence of the bio-fuels industry.

If all the ethanol plants now on the planning boards were to come into production, and there's no reason to think they won't, 10% of all the nation's cultivated land, roughly 30 to 35 million acres, will be devoted to biofuels within the next 5-6 years. Taken together with the loss of land to urbanization and other forms of industrialization, we could lose close to 100 million acres of cultivated land over the next several decades. This will certainly intensify the competition for land, and so for the wildlife, hunting and fishing communities, that could be a big negative.

How do you see the politics playing out on this farm bill?

Farm policy is pretty much the exclusive domain of the house and senate agriculture committees, and their subcommittees. Their process is already started, and we're guessing that by July they'll have marked up a farm bill.

Having said that, I think it's going to be a challenge for the agriculture committees this time around. The committees are primarily dominated by congressmen who represent the districts that get the most subsidies. So if you're talking about reform, it's going to be difficult for them.

There will be pressure on the chairs of those committees to work hard at a different kind of farm bill, however, and if the committee bills are unacceptable, it's likely that floor bills will be offered up by an alliance of reform-oriented groups. In 2002, an alternative conservation bill was taken to the house floor because the groups, mostly conservation and environmental groups didn't like what they saw. That bill, while it failed, received 200 votes. To me that indicates that many in congress are getting a little fed up with the work of the committee.

Is this November's election a factor?

That's a good question, but a little hard to predict because farm policy is not partisan politics, it's regional politics.

One thing that will be important to watch is the margin in each chamber. The margins will be narrower, which will mean that a relatively small group of moderate congressmen or senators, if they work together, could swing things one way or another.

How much does support from the general public matter?

Well, mostly the general public doesn't pay much attention to farm policy, it's arcane and complex. But I think there's a win-win-win situation here that's good for agriculture, for the environment, and for the public. So all we have to do [laughs] ALL we have to do is re-arrange the incentives. It will make a great political constituency if this ever comes together.

Erik Kancler is the executive director of Central Oregon Landwatch, a non-profit land use watchdog group based in Bend, Oregon . He is also a freelance journalist, a photographer, and a part-time ranch hand.

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