Slack Farm Economy Gets Bush’s Early Attention

Just days after the federal government declared his drought-ravaged home state of Texas an agriculture disaster area, President-elect George W. Bush and his designate for Agriculture Secretary, Ann M. Veneman, are meeting with farm groups and state agriculture officials in Austin, Texas, today to discuss the steps necessary to stabilize the ailing farm economy.

The debate over farm policy is certain to heat up next year as lawmakers seek to hammer out a farm bill to replace existing legislation that expires in 2002. Bush’s speed in meeting with farm groups to discuss his agenda is an important indicator that he considers farm policy a priority, analysts say,

Rising costs for seed, fertilizer and energy, coupled with historically low commodity prices, have pushed farm income down dramatically in many areas.

“Clearly agriculture has been in a slump,” said Mark Drabenstott, an economist at the Federal Reserve Bank of Kansas City, Mo. “An abundant harvest not only in the U.S. but throughout the world in the past three or four years, coupled with the downturn in Asia, has left us . . . with surplus supplies. And that’s weighted down crop prices.”

Farm groups hope to use the meeting to push for price supports, a more aggressive trade policy, and protections and tax breaks.

“We want to ensure that the new administration understands the plight that American agriculture is experiencing, which is considerably different than it was when the last farm bill was written in 1996,” said Gaylon Booker, vice president of the National Cotton Council, which will participate in the meeting.

With government price-support and disaster-relief payments to farmers reaching record highs, farm groups expect a difficult time getting these programs expanded. Indeed, says Drabenstott, there are key differences between what some call the current farm crisis and that of the mid-1980s, when farm land values plummeted, lending was cut off and foreclosures soared.

Some groups are simply urging Bush to create a more sustainable safety net for agriculture. “We want a system where producers will know from year to year what the payments will be, rather than have ad hoc payments allocated by Congress,” said Bob Stallman, president of the American Farm Bureau Federation.

On the campaign trail, Bush has pushed to maintain emergency assistance for farmers who are making transitions to market-driven production. He has also sought to restore fast-track presidential trade negotiating authority and supported setting up tax-deferred accounts for farmers to draw on during downturns. He favored elimination of the estate tax--a major issue for family-owned farms--and as governor fought for passage of one of the strictest private property laws in the nation.

Sen. Charles E. Grassley (R-Iowa), a member of the Senate Agriculture Committee, says it will be important for Bush to address plunging commodity prices in the next year, but even more important, he says, will be a commitment by Bush to open up new markets and remove trade barriers for U.S. farmers.

“Early on in his administration he needs a strong statement that he believes in the multilateral trade negotiations process and that he will work within it,” Grassley said. “If farmers can’t sell their products overseas, there’s never going to be any profitability in farming.”

Growers are also looking for protections to help them cope in an increasingly global market.

California farmer Chuck Cox, who grows tomatoes and apricots in Westley, says he is optimistic about the agricultural outlook under a Bush administration, particularly with Modesto native Veneman as Agriculture secretary. But he adds that there’s a lot of work to be done to help him and other farmers survive as low-cost imports have flooded the market.

“How can it be that Turkish apricots can get to the West Coast cheaper than we can do it ourselves? I just want a level playing field when it comes to exports and imports,” he says.