Western producers of basic ag commodities — cotton, wheat and rice — told their congressmen to leave in the intravenous tube of emergency federal help for a couple more years so they can survive to farm another day.
However, major surgery on the federal farm program will be necessary in the new 2003 farm bill — now dubbed Farm Security Act — to eliminate the need for life-saving IVs in the future.
Two panels of eight prominent California producers told U.S. Rep. Saxby Chambliss, chairman of the House Agriculture Subcommittee on General Farm Commodities and Risk Management, they don't like getting emergency life-support government checks any better than anyone else. However, without the emergency assistance they've been receiving from Congress over the past three years they would not be surviving today. And, that is about all they are doing.
The economic plight of producers is the worst he has seen in his 35 years of farming, said Tranquility, Calif., producer John Pucheu, chairman of the Supima Association, president of California Cotton Growers Association and past chairman of Calcot.
Gregg Palla, Kern County, Calif., producer described his fellow producers appearing before Chambliss and two California congressmen, U.S. Rep. Calvin Dooley of Hanford and George Radanovich of Mariposa as “the best of the best” who today are not focusing on improving profitability, but are concerned about staying in business.
Chambliss agreed: “My good farmers who never complain are now coming to me and saying the situation is serious.”
$80 billion appropriation
Congress has an $80 billion appropriation to solve the problem in the new farm bill, an amount the congressmen said is surprisingly large, but nevertheless needed.
They wanted to know how best to use that money to keep American agriculture viable, and they need answers quick. According to Chambliss, House Ag Committee Chairman Larry Combest of Texas wants a bill drafted before the August recess and ready for floor action when legislators reconvene in September.
And, Combest wants “no rock unturned” to find a way to get farmers out of the current malaise, said Chambliss.
California producers have not changed their opposition to mandatory supply constraints just as they once again asked for an end to payment limitations.
Hanford, Calif., farmer Chuck Nichols said payment limitations punish California farms larger than a few hundred acres. Crafters of the next farm bill will have to choose whether it is “more important to have a healthy farm economy determined by efficiency or a smaller, much higher subsidized agricultural economy with many less efficient producers.”
While issues like payment limitations and supply management have been troublesome to Western producers, much of today's current woes are the result of a strong U.S. dollar, according to the producers. It as much as anything has derailed the intent of the last farm bill, which was heralded as the end-all subsidies of farm bills.
The high value dollar has effectively closed doors to export markets, according to Dan Errotabere of Riverdale, Calif., chairman of the California Cotton Growers Association. Expanding exporters were one of the cornerstones of the FAIR Act.
Favor indexing farm support
Errotabere, Nichols and the others advocated indexing federal farm support to the strength of the U.S. dollar and providing support for producers when the value of the dollar hinders export sales.
“There is a one to one correlation between my bottom line at the end of the year and the strength of the dollar,” said Nichols.
All producers also support the concept of a counter-cyclical income support program.
However, Western producers believe the ultimate way out of their current plight is to sell out of it.
One suggestion that captured the attention of all three congressmen was Lemoore, Calif., grower Craig Pederson's idea of a domestic Market Access Program (MAP) like the one now federally funded for foreign sales of U.S. products.
Pederson, immediate past chairman of the California Wheat Commission, said farmers are running out of profitable cropping options and must start acting more as entrepreneurs than farmers.
“Our new opportunities must lie in diversifying up the chain and seeking new value-added options for our products,” Pederson said, who added that the European Union spends more on market development in the U.S. than the U.S. spends on comparable programs worldwide.
“We have a market here…tremendous potential to expand our sales and our farm incomes if farmers act as entrepreneurs,” he said.
The Kings County farmer quickly won an ally in Chambliss who said if Pederson's idea could do for other commodities what Cotton Incorporated's Cotton USA program has done, he would support it.
Insurance not cost-effective
Each Western producer also supported crop insurance reform. None used the current program because it is not cost-effective for high cost irrigated farming. Errotabere endorsed the “cost of production” insurance concept now under review by the federal Risk Management Agency.
The government has committed “billions of dollars” to crop reform and Errotabere said he hopes it resulted in true risk management products not subject to abuses.
While the federal farm program has been a disaster under the FAIR act, Helm, Calif., producer Don Cameron and the others supported the planting flexibility in the act as well as the marketing loan program.
However, American farmers are on the “edge of economic collapse. Without rapid, major support to our industry, we will be in the same food supply as we are with our oil supply,” said Cameron, first vice chairman of the California Tomato Growers Association and California chairman with the American Cotton Producers.
Palla said resolving the farm crisis is not simply an issue of how much to support farmer, but of strategic importance to the well being of America. He encouraged the congressman to “put strategic importance on American agriculture.”
“Our new opportunities must lie in diversifying up the chain and seeking new value-added options for our products.”
While the hearing focused on the basic commodities, all of the producers said the economic health of wheat, cotton, rice, soybeans and the like have direct impact on California's other high value crops. When the economic return for these basis commodities is low, Western producers switch to other, non-commodity crops and that often leads to oversupplies and low prices there.
While western producers do not support mandatory supply management, they do support expansion of the Conservation Reserve Program, even though it is not widely used in the West. It does throttle down the supplies of the basic commodities, making the remaining supplies across the U.S. more profitable.
The challenge of the new Farm Security Act is how we can build on the past success of American agriculture being a low-cost provider of food to the nation and maintaining this national resource, said Pederson.