LOOKING BACK BUT THINKING AHEAD, OVERVIEW OF U.S. AGRICULTURAL POLICIES OVER TIME

Some say federal farm and agricultural policies reflect conditions and influences of the time.  Since the establishment of the New Deal programs of the 1930’s, there has been significant debate and many changes in the focus and direction of U.S. farm policy.

One effort to look back and forecast into the future took place in 1984 with the Farm Credit System.  With the debate now going on with the U.S. budget, and the pending farm bill, it is useful to speculate again about the direction of national agricultural policies.

PROJECT 1995:

Project 1995 was a national effort by Farm Credit System to look into the future relative to a number of subjects: cooperatives, rural America, finance, the farm sector, and agricultural policies.  A number of experts in the field, in and out of government, were interviewed in each area to get their perspective on the future.  Conditions at the time in the U.S. included high interest rates, high inflation, an overvalued dollar, and a high deficit.  The U.S. was engaged in a Cold War with the then U.S.S.R. The value of U.S. farm exports had grown from $6.7 billion in the 1970’s to $32 billion by 1979.  Farm program costs had reached $18.8 billion in 1983.

The Farm Credit System, “Government Policy Toward Agriculture and Finance in 1995”, June 1984:

This was a project that I was fortunate to have helped manage with the President of the then Springfield (MA) Farm Credit Banks. The study methodology involved the development of questions to help identify and analyze current and future trends.  These questions were discussed during in-depth interviews with about fifty national experts.  Among those interviewed were members of Congress, congressional aides, university professors, financial consultants, media experts, representatives of trade associations, and executive branch officials.   Those interviewed had a grasp on the past, and a perspective on the future.  Some notable individuals at the time included then Congressman Leon Panetta (now Secretary of Defense but then a member of the House Committee on Agriculture); Herman Tallmadge, former U.S. Senator from Georgia, former Governor, and former Chair of the U.S. Senate Committee on Agriculture; John Block and Richard Lyng, one then Secretary of Agriculture and the other to become Secretary of Agriculture; Earl Butz, former Secretary of Agriculture in the Nixon Administration; Don Paarlberg, Professor Emeritus at Purdue University and an official in U.S.D.A. during the Eisenhower Administration.

The Report noted, in its background statement, that prior to the New Deal, questions about farm policy were often indistinguishable from broader policy questions about the U.S. economy as a whole.  Some of the most prominent political issues for farmers in the mid nineteenth century concerned tariffs, the gold standard, corporate charters, monopolies and the commercial banking system.  The explicit and implicit goals of the Agricultural Adjustment Act of 1933 and later statutes were to: 1) increase productivity, 2) enhance farm income, 3) stabilize farm prices and supplies, 4) allow for orderly marketing, 5) protect the natural resource base, 6) ensure food security, 7) protect the health of the public, 8) preserve the family farm, and 9) promote agricultural exports.  The report also noted the many changes that had taken place in U.S. agriculture since the passage of the New Deal programs.  These included: 1) technology advances, 2) links with the general economy, 3) internationalization of U.S. agriculture, 4) structural changes in the farm sector, 5) increased farm program costs, and 6) decline in the farm population.

The extensive interviews conducted with these many individuals led to the following conclusions:

• U.S. agriculture will consist of three distinct segments…large farms, small or part-time farms and a transitional middle group.
• Government support programs will likely have some restrictions limiting the level of support.
• The farm programs, which exist in 1995, will likely provide a “safety net” but the safety net will probably be set at relatively low levels.
• U.S. agriculture and the abundance of food will continue to be taken for granted by Congress and the American public.
• Congress will be more urban and less willing to grant agriculture special favors.
• Congressional committees, other than the agriculture committees, will have a hand in developing legislation that affects agriculture.
• The “farm bloc” will continue to be fragmented.
• Nonfarm groups will become increasingly important in the agricultural policy making programs.
• A long-term and comprehensive agriculture and food policy is urgently needed to balance supply and demand and to enhance marketing opportunities worldwide for U.S. agricultural products.

Many of those interviewed felt that the internationalization of U.S. agriculture exposes farmers to new sources of instability that cannot be solved by existing domestic farm programs or any other singular solution.  It is in that context that the many advocated the need for a long-term and comprehensive agriculture and food policy as noted above.

PERSPECTIVE ON CHANGES IN AGRICULTURAL POLICIES OVER TIME:

Farm policies reflect conditions at the time, and the influence of special interest groups.   Some experts contend that there are three distinct periods in federal agricultural policies (see Flinchbaugh and Knutson, Choices Magazine):  These are 1) the price support era of the 1930-1960’s, 2) the income support era of the 1970-1990’s, and 3) the market oriented era of the l990’s to the present.  In an effort to maintain support from more urban members of Congress, new titles and programs have been added over time.  Examples include the food stamp program in 1961; conservation provisions and land retirement in 1985; renewal energy in 2002; and specialty crops in 2007.  Note in 1930, 21.5% of the workforce was engaged in or employed in agriculture, and the agriculture GDP was 7.7%; in 2002, 1.9% was employed and the GDP was .7%.

CONDITIONS TODAY THAT IMPACT THE FUTURE OF U.S. AGRICULTURAL POLICIES:

Since the 2002 Farm Bill became legislation, the political environment has changed in Washington.  The continuing wars in Iraq and Afghanistan have commanded billions of dollars, and the costs of many mandatory spending programs have increased dramatically.  Congress is divided among partisan lines, and compromise seems an elusive goal to many.  It is in this context that Congress developed a “grand plan” to address the federal deficit.  The special congressional committee of twelve is asked to cut the federal budget by $1.5 trillion, and reach agreement by November 2011.  If they are unable to do this, automatic sequestration is to take place in the amount of $1.2 trillion, evenly split between domestic and defense spending.

What are some of the choices going forward for agricultural policies?  It is important to understand the USDA program costs.  Approximately 74% of spending is for nutrition assistance; 13% for farm and commodity programs, and 7% for conservation and forestry.  Of the total USDA budget, $121 billion (81%) is for mandatory programs, and $24 billion (19%) is for discretionary programs.  Mandatory programs include nutrition assistance, farm commodity programs, and crop insurance; export promotion programs, and a number of conservation programs.  Discretionary includes WIC (women, infants, and children nutrition), rural development loans and grants, research and education, soil and water technical assistance, animal and plant health, management of National Forests, wild land fire, and other Forest Service activities, and domestic and international marketing assistance.  Thirty-seven programs now in the Farm Bill lose their baseline funding in 2011.

WHAT DOES THIS MEAN FOR VERMONT GOING FORWARD:

It is difficult to project the future at this time relative to possible budget changes and the impact on Vermont.  Priorities have included nutritional assistance (13.6 % of Vermonter’s are food insecure, and one of eight receive 3squarevt (food stamps)), soil and land conservation, economic development, food safety and animal health, food security (local and regional food systems), value added agriculture product development and marketing, education, and research to name but a few.  Many of these various priorities of the past will likely see reduced federal support.

VERMONT’S FARM TO PLATE INITIATIVE AND THE WORKING LANDSCAPE COUNCIL ADDRESS AGRICULTURE, LAND USE, AND DEVELOPMENT NEEDS:

Both efforts are complementary:  one, Farm to Plate (see Vermont Sustainable Jobs Fund at www.vsjf.org), with a list of strategic goals for the future of agriculture and food systems in Vermont, and the other, with an Action Plan to maintain and encourage a working landscape in the State (see Vermont Council on Rural Development at www.vtrural.org).  Both recognize the need for significant capital investment going forward in order to achieve articulated goals, and to ensure policy changes at the State level, as well as collaboration at all levels.

While exciting things are taking place in agriculture and food systems in Vermont, dairy farming represents the major economic force and has the greatest impact on agricultural land use.  It is in this context that there has been much discussion over the years about the future of agriculture.  (See my blog posting of June 14^th, Tipping Point, or Events or Conditions that Led to Changes in Vermont Agriculture Over Time and the Dairy Sector Today).  This blog posting listed some of the significant actions that have been identified from past studies and discussions to address the dairy industry’s future in Vermont.  Some of the specific actions needed to address the above include: 1) risk management strategies to include on the farm diversification, 2) new food product innovations, 3) strategies to grow the milk supply, 4) increased collaboration with educational and research institutions to include UVM’s food system’s spire of excellence, 5) farm incubators to train a new generation of farmers, and 6) use of dairy profitability and farm viability teams.

BLOGGER’S COMMENTS:

It was after the 1927 flood that the “Report Rural Vermont, A Program for the Future” was completed by the Vermont Commission on Country Life.  The Report noted in its introduction that “whatever may have been the misgivings when the great flood of November 1927, and the magnificent response to the call for concerted effort awakened in Vermonters a fuller sense of their power and gave them a new impulse which will be felt through the years.  Fortunate it was that the work of the Commission on Country Life synchronized with this new impulse.”

The recent flood has again demonstrated the magnificent response at all levels in Vermont, and has again awakened a fuller sense of power to address challenges. The two initiatives mentioned above, Farm to Plate and the Working Landscape Action Plan, have laid out objectives going forward for farms, forestry, and food systems and thus a working landscape so important to Vermont’s past, present, and future.  Like the Country Life Commission Report of 1932, these plans are synchronized with this new impulse for positive response in the future.

REFERENCES AND SOURCES OF INFORMATION FOR THIS BLOG

• Project 1995, “Government Policy Toward Agriculture and Finance in 1995”, The Farm Credit System, June 1984.
• Project 1995, “The Nature and Role of Cooperatives and Agribusiness in 1995, The Farm Credit System”, June 1984.
• The 1985 Farm Bill and Future Natural Resource Policy Education, by Richard Barrows, University of Wisconsin-Madison.
• The 20^th Century Transformation of U.S. Agriculture and Farm Policy, by Carolyn Dimitri, Anne Effland, and Neilson Conklin, USDA ERS, Electronic Information Bulletin No. 3, June 2005.
• Farm Subsidy Tradition and Modern Agricultural Realities, by Daniel A. Sumner, Director, University of California Agricultural Issues Center.
• Agricultural Policy Outlook: Looking Back Focuses the Road Ahead, by Barry Flinchbaugh and Ron Knutson, in Choices, The Magazine of Food, Farm, and Resource Issues, 4^th Quarter 2004.
• The Grand Bargain of U.S. Farm Policy: Yesterday, Today, and Tomorrow, by Stephanie Mercier, U.S. Senate Agriculture Committee, AAEA Annual Meeting, Long Beach, July 2006.
• Growing Pressures on Farm Policy, by J. Corey Miller, Mississippi State University, in Regulation, Winter 2004-5.
• FY 2012 Budget Summary and Annual Performance Plan, U.S. Department of Agriculture.
• Economic Effects of U.S. Dairy Policy and Alternative Approaches to Milk Policy, USDA, Report to Congress, July 2004.
• The Hagstrom Report, Stabenow, Roberts, Investigating Farm Program Cuts, August 25, 2011.
• The Environment of the Next Farm Bill Debate, by Steven L. Klose, Choices Magazine.
• Deficit Reduction has Serious Implications for Future of U.S. Agriculture, American Farmland Trust, August 10, 2011.
• Farm Bill: Biofuels, Trade; Agriculture Economy; Animal Agriculture; and Climate, in FarmPolicy.com
• Farm Safety Net Programs: Issues for the Next Farm Bill, by Dennis A. Shields, Jim Monke, Randy Schnepf, Congressional Research Service, September 10, 2010.
• Downsizing the Federal Government, by Chris Edwards, CATO Institute, July 2009.
• The 2012 Farm Bill: An Opportunity to Support Farmers and Promote Public Health, by the Robert Wood Johnson Foundation, August 2010.
• Don’t End Agricultural Subsidies, Fix Them, by Mark Bittman, N.Y. Times Op-Ed, Monday September 5, 2011.

LAST TRIVIA QUESTION: Who was the first Vermont Secretary of Agriculture who promoted tourism?

Answer:  The first promotion of agricultural tourism was by Victor Spear, Statistical Secretary to the Vermont Board of Agriculture.  In 1893 he stated “Now there is no crop more profitable than this crop from the city, and it is one that comes directly to the farmer, and he should encourage and promote this visiting from our city cousins.”  He also stated in 1894 “It needs no argument to prove the importance of this industry to the State.  It is doubtful if any agricultural product, except the dairy product, is bringing as much money to the State at the present time as our summer visitors, and even our dairy product would find there a close rival in point of profit.” His enthusiasm, vision, and leadership led to the publication, A LIST OF DESIRABLE FARMS AND SUMMER HOMES IN VERMONT written in 1895.

TRIVIA QUESTION:  What was the year that the Vermont Department of Agriculture was established?

Edition 12, September 8, 2011

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