After Congress passed a 2014 farm bill based on the rosy price forecasts of 2012 and 2013, some who have followed the ups and downs of the farm economy have been waiting for the other shoe to drop.
The Environmental Working Group was one of the first activist groups to cite the obvious: Agricultural Risk Coverage and Price Loss Coverage payments are likely to run much higher than predicted in the next three years.
The folks who have made a cottage industry of reporting farm program payments to farmers for the last two decades accused Congress of reneging on promises the new farm programs would save money. The Congressional Budget Office forecasts ARC and PLC payments will total $8 billion more than expected.
An EWG press release citing the higher projection glossed over the fact the farm bill is working as intended. If commodity prices had remained at the levels seen in 2012 and 2013, ARC and PLC payments would be much closer to the initial forecast and possibly below it.
Instead, prices have fallen by as much as 50 percent as crop supplies have caught up with demand and governments like China and India have increased their subsidies, pushing crops in surplus even higher. In some cases, the increased payments are helping farmers pay their bills and secure financing for 2016.
In the South, some producers are getting help while others are seeing little benefit from ARC or PLC. Cotton, which gave up its program payments because of Brazil’s WTO case, has neither. Cotton industry leaders are trying to win approval for treating cottonseed as another oilseed, but Agriculture Secretary Tom Vilsack has yet to rule on the request while the clock is ticking for 2016. (Note: Media reports say Vilsack is indicating he does not have authority to make the designation, but farm groups disagree.)
When farmers can’t pay their bills, conservation practices and spending more dollars on more environmentally-friendly pesticides and technology go out the window. And, as farmers quit, small businesses close their doors and rural communities continue their downward spiral.
If the EWG is as concerned about the environment and poor people as it claims on its fund-raising website, it can stop pointing fingers and begin lobbying for a more equitable and effective farm safety net.