Agricultural policy is being negatively affected by the same refusal by elected officials to compromise on the general economy issues.
“We are letting this economy burn because the wingnuts on either end have got to have 100 percent and zero percent,” said Barry Flinchbaugh, Ph.D., Kansas State University ag economist and agricultural policy professor. “I teach my policy class that there are two ways to govern in this world, and only two ways that have been defined and figured out by mankind. Number one is compromise in a civil society and number two is at the point of a gun. It is time for civil discourse and compromise.”
The 2012 farm bill could be written by the congressional Super Committee on debt resolution, contends Flinchbaugh, who started consulting with politicians in 1968 in writing the farm bills. A major problem is that “there is only one member on that Super Committee that knows the difference between a bull and a steer.”
“It is the function of that committee to give the ag committees a budget; it is not their function to write a farm bill. The president of the United States just tried to write the farm bill Monday — $33 billion of cuts over a 10-year period, 13 percentage point cuts for agriculture out of discretionary funds,” he noted. “This farm bill is definitely the most difficult one to write I’ve ever been involved with. We are in the midst of a perfect storm. We have a record federal deficit, and we have a record net farm income.”
Flinchbaugh was the guest speaker Thursday evening of the “Energy, Global Food Security and Ag Policy” agribusiness professional development series for Kansas State University Master of Agribusiness graduates.
He showed a chart of farm bill expenditures through the years. The biggest federal farm bill commodity program payout occurred in 2000 at $32 billion, and this year the expenditure will be about $8 billion, a four-fold cut. And Flinchbaugh doesn’t think those numbers are emphasized enough in the farm program discussions. The number that accompanies this is the determination that most recently only 10 percent of farm income came from farm programs when it was a high of 60 percent not that long ago.
It is a myth that only large farmers receive farm bill payments. A contribution of ag products per farm size and federal payments disproves the myth. Flinchbaugh split farms into three sizes.
The smallest farms contribute 7.1 percent of product and receive 28.7 percent in government payments, mid-size farms contribute 19.4 percent of product and receive 31.7 percent of federal money and the large farms producing 73.5 percent of the ag products only received 39.5 percent of the federal payments in 2010.
“We are getting ourselves backed into a corner where we are going to pit crop insurance and revenue insurance against traditional farm programs,” he said. It is the weather disasters of 2011 that has farmers thinking that way, but Flinchbaugh doesn’t think the two have to be pitted against each other yet.
“It amazes me the farmers and agribusiness people that I run into that think the current prices are the new normal,” he said. “I hate to tell them I’ve lived through four new normals, and the old cost/price squeeze that plagued agriculture historically will continue to plague agriculture in the future. And, therefore, to write a short-term farm bill for current prices is very, very short sighted.”
If congress and the president cannot get it figured out, Flinchbaugh contends, the original permanent farm bill of 1938 and permanently amended in 1949 goes into effect by default.
“This farm bill debate will be a battle of the century, but there will be a farm bill,” was the economist’s final words on the topic.
Flinchbaugh noted there are other agricultural issues that have to be addressed; dealing with global warming, free trade agreement ratifications, and biotechnology to feed an increasing world population.
Increasing productivity per acre from an approximate 1.4 percent annual increase to a 1.75 percent annual increase will require biotechnology. “It simply cannot be done without biotechnology. It is impossible,” Flinchbaugh said. “If you are anti biotech, you are pro starvation.”