Driving through the rolling hills of western Kentucky, it's easy to see why some observers might think the reports of economic troubles in farm country are exaggerated. Field after field of soybeans loaded with pods could give the impression that farmers are preparing for what appeared to be a bountiful harvest and good times.
I did not make it to Indiana on my recent “summer” vacation, but I suspect that conditions are similar across the Ohio River. According to USDA, Indiana farmers are expected to harvest an average of 49 bushels of soybeans per acre, up 3 bushels from 2000.
That may be part of the reason why Sen. Richard Lugar, R-Ind., thinks farmers don't really need the Agricultural Market Transition Act (AMTA) or marketing loan payments contained in the current farm bill.
Lugar, who rarely misses an opportunity to point out he is the only farmer on the Senate Agriculture Committee, has unveiled a new farm bill proposal that would eliminate or phase out such payments in new farm legislation either this year or next.
Lugar's proposal would substitute a revenue insurance/voucher scheme that appears to guarantee that a farmer's income would not drop below 80 percent of his five-year average. AMTA payments would end with the expiration of Freedom to Farm in 2002 and loan deficiency payments by 2006.
The farm community's response to Lugar's ideas has not been favorable. Only Agriculture Secretary Ann Veneman had anything good to say about them, calling the Lugar proposal a “thoughtful piece of legislation that was consistent with its statement of principles.”
What troubles farmers, including many from Indiana judging from press reports, is that guaranteeing 80 percent of their on-farm income over the last five years would mean guaranteeing a loss. (A recent Associated Press article quoted several Indiana producers as saying that they couldn't stay in business if the AMTA payments and loan deficiency payments of the current farm bill were not extended beyond 2002.)
The fact that Lugar introduced any farm bill proposal was something of a surprise since he had been one of the most vocal opponents of passing a new farm bill this year. The senator said he couldn't believe the House was considering a farm bill in a time of war when the House passed its farm bill in October.
The Senate Ag Committee continues to work on a new 2001 farm bill, although administration officials are calling on Congress to wait, saying that the same funding that is available this year will be available in 2002 for “good farm legislation.”
Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, laughed at the promises. Noting that Congress writes the budget and the administration cannot offer any assurances, Conrad said: “If we do not use the money that is available this year, you can forget a bill with the same level of funding in 2002.”
Like sightseers driving through farm country, administration officials — and Sen. Lugar and other farm bill critics — are seeing what they want to see when they look at the farm economy instead of what's really there.
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