This document provides background information and summarizes the debate over the Federal Farm Bill. The links to the left will lead you to public documents that we have found.
One of the realities
of farming is that much of what leads to success or failure is out of one's
control. The weather and the level of worldwide crop production in any one
year can make all the difference between making a profit and suffering a catastrophic
loss. Farmers cannot move nimbly, quickly adapting to changing market conditions.
Since they're only paid when the crops mature and are purchased by a broker
or food producer, farmers often carry hefty loans to see them through the
year. All of this is a prescription for insecurity and vulnerability.
The primary public
policy tool to help farmers so they are not wiped out by a bad weather year,
high interest rates, or a bumper crop that drives prices down, has been commodity
price supports. Over the years the Department of Agriculture has set parity
prices for commodities designated by Congress. This approach has included
wheat, cotton, corn, peanuts, milk, and other agriculture products. The parity
price is an income floor to provide for what the government determines to
be a reasonable return on investment. If the price for wheat, for example,
drops below the parity price, the government steps in and pays the difference
to the individual farmer. The rationale for parity support is that it is in
the public interest to keep food prices relatively stable and to protect farmers
who provide such a valuable service to us all.
Over time the
parity programs became increasingly discredited. As more and more countries
have developed their agricultural sector, the U.S. price for certain commodities
has moved above the international market price. One lobbyist complained, "Sugar
sells for 5 cents a pound in Canada and in Europe and in this country it costs
about 28 cents." Parity is a subsidy and in strict market terms subsidies
are inefficient. A second reason parity programs have lost support is that
increasingly farming is being taken over by large corporations and the family
farm is disappearing. Sympathy for the salt-of-the-earth farm family does
not extend to farm factories raising and slaughtering hundreds of thousands
of pigs a year at a single (and very smelly) site.
In 1996 Congress
passed the Freedom to Farm Act, which gradually phased out parity programs
over the next seven years. Looking back at the law a farm lobbyist said bluntly,
"It failed miserably to achieve the goals it was designed for."
In exchange for the loss of price supports farmers were given broader freedoms
in terms of acreage allotments and other regulatory relief. But small farmers
couldn't cope financially with the gradual decline in prices and Congress
began work on legislation in the 107th Congress to put back in adequate price
The general strategy
for getting this bill through-a bill encompassing a program that was generally
unpopular and makes groceries more expensive to consumers-was to load the
bill up with policies benefiting lots of different constituencies. Different
crops are grown in different parts of the country, so the parochialism of
individual representatives and senators worked to the advantage of the legislation
as different benefits were put in for different commodities. But many more
constituencies had a stake in the bill too. Said one observer, "It covers
a lot more than the farm programs, all of our nation's nutrition programs
are reauthorized, humanitarian assistance; you have trade, rural development,
conservation, [and the] environment." Subsections of the bill dealt with
topics ranging from non-traditional crop production, to animal welfare, to
New England barn restoration - resulting in a prodigious breadth of interest
group involvement. With all these important constituencies connected to the
bill, the House and the Senate easily passed the omnibus legislation in 2002.