Farm Law Changes, Tighter Payment Limits Would Harm Georgia and U.S. Agriculture

Agriculture Secretary Mike Johanns heard a familiar message from Georgia cotton producers regarding farm policy - that the structure of the 2002 farm bill should be maintained for its duration – through the completion of the 2007 crop.

October 21, 2005
Contact: Marjory Walker or T. Cotton Nelson
(901) 274-9030

MOULTRIE, GA – Agriculture Secretary Mike Johanns heard a familiar message from Georgia cotton producers regarding farm policy. That message was that the structure of the 2002 farm bill should be maintained for its duration – through the completion of the 2007 crop.

Speaking at a USDA farm bill listening session here at the Sunbelt Ag Expo here on Oct. 18, Brooks County cotton producer Van Murphy told the Secretary that a stable and consistent farm program provides an essential foundation upon which growers can the make long-term investments necessary in today’s agriculture. Murphy, who also is ginner and warehouseman, said that the current program provides planting flexibility to growers and an effective safety net in times of low prices plus it has minimal impacts on overall plantings and prices.

Tom Stallings, a Funston producer, said that, “Today, farmers face different risks than the vast majority of businesses. Many factors are beyond a farmer’s control: a strong dollar, unanticipated oversupply in high production years, depressed prices and destructive natural events that can wipe out an entire crop. An effective farm program is essential to cotton producers and provides stability in production, financing and marketing. Any policy change that would reduce the level of support directed to farmers or that imposes stricter payment limits would adversely affect beginning farmers and small operators. It is important to note that more restrictive payment limits would also hurt our international competitiveness by restricting farm size to a level that is, in many cases, less than economically efficient.”

Stallings said changes in limitations also likely will result in a shift in production to other crops. A federal Payment Limit Commission, he noted, has found that limitations affect cotton and rice farmers disproportionately compared to feed grain, oilseed and wheat farmers.

Stallings also pointed out that changes in eligibility rules force changes in rental contracts with the possible consequence of forcing landlords to cash rent rather than share rent land. This change would adversely affect beginning farmers and small operators who are normally unable to obtain production financing on cash rent operations.

Moultrie producer Mark Mobley emphasized that, “Agriculture in Georgia would be severely harmed by more restrictive payment limits. Analysis by the Payment Limit Commission indicated that tighter limits on contract payments under the ’96 farm bill would have taken more than $15 million from Georgia’s farmers.”

Mobley also stated his hope that the Step 2 component of the cotton program be continued for as long as possible – as it is an integral part of cotton’s marketing loan.

Jack Hunnicutt, president of ABC Bank in Moultrie, which has banks in Alabama, Georgia and Florida, added that farm financing for younger farmers and those wanting to enter farming was highly dependent on having a stable farm law.

The Georgia Farm Bill Forum was the 18th hosted by Agriculture Secretary Johanns and the 34th in a series of forums in which members of the public are invited to express their views about farm and rural policy, in preparation for the development of the next farm bill in 2007.