'95 FARM BILL: WHAT WILL IT LOOK LIKE?

Most area farmers are busy harvesting corn, milo and rice or getting ready to combine soybeans and pick cotton and are not focusing on the 1995 farm bill debate that is currently taking place in the halls and rooms of the U.S. Senate and House. Farmers who are leaders in their respective commodity groups are spending time in the congressional halls when they can be enticed away from their combines and cotton pickers. Ag lobbyists are hard at work pushing their organizations' positions. All involved realize that any federal farm legislation is budget driven and must come up with significant savings over the next five to seven years.

There are currently several proposals that have been surfaced by different senators and congressmen and their staff members, most of whom are connected to the House and Senate agriculture committees. The House Agriculture Committee chairman, Pat Roberts, has offered the Freedom To Farm Act, or FTFA, which at first blush appears to be a simplified way to support row crop farmers, allow them to produce what they market dictates, provide a transition away from farm program payments and also be within the federal budget guidelines. There would be no mandated acreage taken out of production under FTFA, but there would be no more price volatility, especially in the first several years of FTFA. Farmers would sign a contract to receive direct declining payments over a seven year period. Many in the general public would perceive this being a form of welfare payments to farmers. Beginning farmers and those who had not participated in farm programs in three of the last five years would not be eligible to participate.

Senators Thad Cochran (R-Miss.) and David Pryor (D-Ark.) have proposed a continuation of the 1990 farm bill called Normal Flex Acres, or NFA, which would make most farmers and local Consolidated Farm Services Agency (formerly the Agriculture Stabilization and Conservation Service) employees happy because they would not have to learn the nuances of a new farm program. The flex option bill would be within federal budget guidelines (this is a must) when 30 percent flex acres are added. It also continues marketing loans for most major commodities which help make those U.S. farm products competitive in a subsidized world market. Since almost 40 percent of our grains, oilseeds and cotton are exported this is a very important part of the legislation.

Flex acres are farm base acres of the major commodities for which no deficiency payment is made, but on which farmers are allowed to plant any crop (other than fruits, vegetables and certain other minor crops). Hence, other flex acres in farm legislation reduces the cost to the federal government and lowers the payments to individual farmers. However, the cost to the federal government cannot be controlled as carefully under NFA as it can be under FTFA.

The NFA legislation would appear to offer more initial stability to commodity prices and thus to the general farm economy and to agricultural real estate values. After several years of either program, basic economics would prevail and commodity prices should be mainly influenced by world supply and demand.

In a third proposal, several farm organizations have advocated a return to much higher commodity price support loans the hoping that world prices would follow our loan prices. Recent history (before 1985) has shown that this type of program just increases the bushels, pounds and bales that the federal government's Commodity Credit Corp. owns. When the loan price is higher than the market price, farmers simply forfeit their commodities to the CCC and those commodities go into government storage, where they ultimately must be sold back into the market, hopefully without depressing prices too much. This high commodity loan program will increase costs to the federal government as well as increase the amount of commodities that the government will control and so is not given much chance of surviving in 1995. It would provide a higher level of income to farmers, especially mid sized farmers.

The University of Missouri's Food and Agricultural Policy Research Institute has done its usual excellent job of analyzing the two leading farm program proposals, FTFA and NFA. The institute points out that under either bill there would be an increase in soybean acres, and a decrease in rice acreage. Farmers and others who are interested in U.S. farm income projections under FTFA or NFA for the next several years should contact Dr. Abner Womack at (314) 882-4827 for more precise information.

Abner points out that "choice between the bills also depends upon you economic outlook. If you believe that the world economy will boom and trade will increase under GATT and NAFTA then Freedom To Farm is the way to go. But, if you believe we are headed for a world recession with a drop in farm commodity prices, the flex option, based on traditional farm programs is more secure, if government spending does not change."

Stay tuned. The next few months will be very interesting in Washington as Congress struggles with the 1995 farm bill.

There are some in Congress who believe that no farm program is the best farm program. Most congressmen and senators who have farm constituencies realize that balance and stability in the new farm bill are necessary for the economic and mental well being of farmers and agri-businesses. Full debate on the floor of the U.S. House will bring out some interesting thoughts on farm programs and how changes in farm legislation will affect America's farm and ranch families. Add the spice of an upcoming presidential election, plus budgetary pressure into the mix, as well as farm commodity groups lobbyists scrambling for positions and the door is open for several choices (or combinations thereof) for the 1995 farm bill. We'll know by mid-December.

Peter C. Myers Sr. of Sikeston is a former deputy secretary of agriculture and is currently president of Adopt A Farm Family of America Inc., a Christian outreach to farm and ranch families in the United States.