Need for Effective Farm Policy

The farm bill reported by the House Agriculture Committee offers a return to stability for rural America and for federal agricultural policy.

Published: February 27, 2002
Updated: March 30, 2017

Committee Bill Will Stabilize Economy of Rural America

After 5 years of agricultural policy that has been insufficient and unresponsive, the farm bill reported by the House Agriculture Committee offers a return to stability for rural America and for federal agricultural policy.

The inherent weakness in the 1996 Act forced Congress to respond in an ad hoc fashion to weak prices and detrimental weather suffered by farmers in each of the last four years. This year-by-year patching and hurried emergency assistance has generated instability in the sector, undermining individual producer planning and the confidence of agricultural lenders.

  • While the ad hoc assistance has been vitally important, farmers and creditors around the country never know how or when Congress will step in to help.
  • Steps should be taken to modify farm policy and provide long-term viability to an industry subject to inherently volatile markets.

Production Agriculture Needs Support – Growers Face Stiff Competition from Foreign Governments

A volatile marketplace has traditionally led to government support for agriculture industry.

Congress has recognized the need to secure a domestic food and fiber supply since 1933 during the Great Depression.

  • The Commodity Title, or farm income and price support, is the heart of every farm bill.
  • Foreign governments are subsidizing their industry at rates far exceeding U.S. support levels.
  • U.S. producers face higher costs of production due to the safe and regulated manner in which commodities and livestock are produced.

A strong U.S. dollar has tended to undermine the competitiveness of U.S. commodities in world markets.

Committee Bill Provides Long-Term Viability Consistent with the Budget

In order to provide more consistent ‘safety net’ for nation’s producers, funds were provided in the FY2002 budget resolution for farm bill enhancement.

The Committee bill offers an acceptable, reasonable and predictable level of support to the sector that is more responsive to price and income declines than the 1996 Act.

  • The fact that this bill takes a long-term approach to agricultural policy will return stability to the sector after several years of highly uncertain incomes and soaring government costs.

Once the sector is secure with respect to federal policy, it can begin to enhance its competitiveness and improve the efficient allocation of resources.