Just when the Republican majority of the House had approved farm subsidies for the next 10 years and the Democrat-controlled Senate, with the support of some Republicans, stood ready to enact subsidies for the next five years, out comes Sen. Richard Lugar (R-Ind.), in an op-ed piece in The New York Times, calling for an end to all farm subsidies.
What is behind this action of Lugar, who was chairman of the Senate Committee on Agriculture until Sen. Tom Harkin (D-Iowa) displaced him? When Lugar chaired the committee, he worked with Harkin in drafting a Senate version of the farm bill that included subsidies. So why the big change now? Why did he suddenly decide that “it will harm most farmers and their fellow citizens,” as he wrote in the article? He gives some of his reasons and perhaps explains more than he intended.
He first cites war needs. Such big expenditures, he said, are out of line when the United States is fighting a “sluggish economy and a life and death war on terrorism.” He does not reveal that Secretary of Agriculture Ann Veneman, speaking for the Bush administration, assured Harkin and Senate Majority leader Tom Daschle (D-S.D.), when they loudly objected to the Republican blocking of the Senate Farm Bill last December, that the billions provided in the general budget for 2003 would be honored, notwithstanding the growing war-related expenses.
Probably more worrying to the Republican high command than Democrat objections were harsh words from an unexpected source, the American Farm Bureau Federation. Its new president, Bob Stallman, was “appalled” by the action of the Republican senators who blocked consideration of the Senate Farm Bill.
Stallman said that “farmers and ranchers will hold accountable those who kept the measure bottled up … If we don’t get a final bill until next year, and the $71.5 billion allocated to agriculture in the budget is cut, we will know who is to blame.”
In calling for an end to all farm subsidies, Lugar knows most farmers will accuse him of destroying their “safety net” just when they need it most. So in the same article, he offers his own safety net. He first says he owns and manages a 604-acre farm in Indiana. He also assures his readers that he “knows the difficulties of making a living from farming.” This is his proposal:
“I have suggested an alternative safety net for all crop and livestock farmers and ranchers. Each farmer would receive a federal payment of 6 percent of total farm receipts. This would enable the farmer to pay the premium for whole farm income insurance that would provide 80 percent of an average farm income taken over a five year period.”
Lugar is candid enough to say that he offered this plan on the Senate floor but it failed by a vote of 70-30. This was probably one of the delaying amendments that helped block passage of the Senate Farm Bill in December.
But what is the farmer getting in this proposal? Economists have not been predicting higher farm prices for the future, and major crops have averaged below cost of production for decades.
So in crop years when there is no insurance claim and no subsidies, with prices at today’s level, income would be about half of costs. In years when claims can be made, the farmer will be even worse off because the maximum insurance claim would be 20 percent worse than a year of better harvest and no claim. A safety net it is not.
If I were still farming and were offered this deal, I would take the money and, if permitted, forget the insurance and consider the 6 percent of my income from farm products as a welcome but inadequate subsidy. There are better plans lying fallow, waiting for warm weather and sensible legislation.
Lem Harris is a member of the Communist Party USA’s Farm Commission.
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