BUILDING A MORE
JUST FRAMEWORK
Reauthorization of the
Farm Bill presents an
opportunity to reshape
our broken agricultural
policies. Now is the time
to build a more just
framework that better
serves rural communities
and small and moderate-
size family farms in the
U.S., promotes good
stewardship of the land,
overcomes hunger
domestically and abroad,
and helps vulnerable
farmers and their families
in developing countries.
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Why the Church Cares About Commodity Reform
From God’s initial command to be good stewards of creation to the Prophets’ call for justice among governments and nations, people of faith in every age are called together to work for the common good. Inspired by Jesus’ command to care for poor and hungry people, people of faith join together to support policies that promote economic justice, strengthen rural communities at home and around the world, care for the land as God’s creation, foster right relations among nations and achieve an end to hunger.
The Churches and faith-based organizations that are part of the Religious Working Group on the Farm Bill call on Congress to reform U.S. farm and food policies to benefit poor and hungry people at home and around the world. Meaningful reform of the current U.S. Farm Bill begins with Title I, Commodity programs. Government efforts to support farmers and equip them with the tools necessary to manage weather, yield and market swings are important. However, current commodity programs have proven to be inequitable and support a trend to ever larger operations at the expense of family farms and biodiversity.
Historically, commodity payments in the 1930s were used to lift farmers and rural America out of economic depression. Today, commodity programs are ineffective in alleviating rural poverty and do not support sustainable economic development. Commodity payments have also become detached from historical supply management mechanisms. This is hard on poor farmers in developing countries when overproduction in developed countries leads to low world market prices. Demographic trends show poor farmers in developing countries abandoning the land to become the urban hungry.
Title I: Key to Meaningful Reform
Mindful of the complex process involved in drafting and shaping federal legislation, the Churches and faith-based groups that are part of the Religious Working Group on the Farm Bill offer the following suggestions for broad reform that, we hope, will be reflected in legislation currently being discussed on Capitol Hill:
 Place meaningful limits on farm payments and close loopholes so that this important safety net for agricultural producers is not abused by commercial or corporate interests.
Make farm programs equitable by targeting support to active farmers that need it most and phasing-out support to those that need it least.
Redirect savings to programs that assist poor and hungry people and encourage responsible stewardship of the land, including nutrition, conservation and rural development.
Eliminate the potential for trade distortions that disadvantage farmers in developing countries.
U.S. food and farm policy should be evaluated in light of its ability to work toward and achieve these goals. People of faith nationwide are following the Farm Bill reauthorization process closely, scrutinizing the proposals being offered for their ability to address hunger and poverty, particularly in rural areas, and the inequity in the current commodity programs. We ask that you share your thoughts about the Farm Bill with your senators and representative during this crucial time.
U.S. Farm Commodity Policy
Redressing Farm Programs for the 21st Century
In 2005, the USDA posed six questions to address the challenges farmers and ranchers face in staying competitive and viable in today’s global market system.
Besides the challenge to stay competitive in both domestic and global markets, there is growing concern about the appropriateness and effectiveness of farm program benefits. Farm policies of the past have created unintended consequences that need to be addressed. The USDA recognizes that commodity program benefits have been capitalized into land prices. Higher land prices are cited as a barrier to entry into agriculture for new farmers as well as a factor in reduced profit for existing farmers.
Our nation’s historic surplus capabilities have led many farmers to think in global market terms. Farm commodity groups continue to push for ever-greater access to foreign markets; they argue this is essential for farm economic growth. But farmers must depend on global agribusiness cartels to move their raw commodities, which in turn seek out the lowest cost producer (not necessarily in the United States) and at prices below the cost of production. Farmers are left to depend on government support payments to make ends meet.
It is widely recognized that the longstanding goal of USDA has been to enhance and stabilize farm prices and incomes. However, NCRLC also sees that the current farm support system results in the disproportionate distribution of program benefits to ever-larger farms. USDA program incentives also lead to increased production and, without subsequent demand, lower market prices. On a global scale, this causes problems for all farmers – and more so for developing nations which can produce agricultural goods, but cannot provide government supports for their rural communities.
The U.S. Catholic Bishops’ statement, For I was Hungry: Catholic Reflections on Food, Farmers and Farmworker (January 2004), serves as an excellent source for addressing agricultural concerns and finding the language to comment on farm policies.
USDA Farm Policy Questions
1) How should farm policy address any unintended consequences and ensure that such consequences do not discourage new farmers and the next generation of farmers from entering production agriculture?
Historical trends in U.S. agriculture have shown dwindling numbers of proprietary family farms and more large-scale contract operations. At the same time, a few agribusiness corporations have come to dominate the nation’s farm and food system. Ongoing corporate mergers and buyouts have led to the concentration of market power by major agribusiness firms in meats, poultry, grain, feedstuffs, and food processing. The consequences have been a loss of transparency in the market and the manipulation of prices that erodes the basic principles of supply and demand in the agricultural sector. Farms and ranches are no longer independent proprietary operations, but increasingly become integrated into food supply chains with no say or control. This has made it difficult for small and medium sized farmers to stay in farming, not to mention a younger generation trying to get started. Future policy needs to address this unintended consequence by supporting a fair competition title in the next farm bill.
Some specific proposals for new and beginning farmers: USDA should support policies and programs that encourage growth of small and medium-sized farms; for example, Sustainable Agriculture Research and Education (SARE) and Value-Added Program Grants (VAPG) should be expanded and directed in part at the promotion of younger generations in agriculture. USDA should also implement the many beginning farmer and rancher provisions of the 2002 Farm Bill, including increased promotion of the Beginning Farmer land contract pilot program, using the authorization for special conservation incentives for beginning farmers and ranchers, and seeking funding for the Beginning Farmer and Rancher Development Program.
2) How should farm policy be designed to maximize U.S. competitiveness and our country's ability to effectively compete in global markets?
In order to comply with World Trade Organization agreements and regulations, the U.S. Government clearly must reduce agriculture subsidies that distort prices and trade. However, such subsidies are masking a deeper problem: government-sanctioned production of low-cost commodities for large processors and agribusiness exporters. Limits must be set on government subsidies, but not at the expense of driving farmers and ranchers off the land. By reducing farm commodity payments to reasonable levels, the money saved should be transferred into conservation "green" payments. The ideal form of support payments should go into the Conservation Security Program, an innovative program that supports small and medium-sized farmers’ ability to compete in the market and also ensures the long-term viability of the nation’s farmland.
Government subsidies should be targeted to small and mid-sized farms, by capping payment levels at $250,000 or less and eliminating loopholes. Increased farm payments translate into higher cash rents and land purchase prices, leaving beginning farmers out of the picture. USDA should help enact the Grassley-Dorgan payment limitations bill.
3) How should farm policy be designed to effectively and fairly distribute assistance to producers?
As a major first step, Congress should enact the Grassley-Dorgan payment limitations bill (S. 385, Rural America Preservation Act). We need effective but limited payments that are directed to family farmers. Commodity payment limitations will reduce incentives for farm consolidation, land price inflation, and overproduction. A major policy shift to conservation support programs will allow a diverse mix of farms and ranches to cover and steward the countryside. Following the principle of limited payments for farm programs, we need to restore effective payment limitations to the Environmental Quality Incentives Program (EQIP) and to provide safeguards against using EQIP to expand concentrated livestock production.
4) How can farm policy best achieve conservation and environmental goals?
The Conservation Security Program, which rewards farmers for effective conservation and advanced stewardship, should become the quintessential program of the USDA. The CSP can serve as the foundation on which to build future farm policy; this program marks a shift from policies that favor commodity production to a renewed emphasis on environmental stewardship of working lands. This program also serves the urgent need to move away from trade-distorting production subsidies. The Conservation Security Program needs to be fully funded and rapidly implemented so that any farmer and rancher in the country can enroll.
For land that is particularly environmentally sensitive and should be removed from agricultural production, emphasis should be placed on cost-effective and long-term easement strategies that maximize environmental protection. This could occur through existing programs like Conservation Reserve or Wetlands Reserve, or through new programs as devised in the spirit of caring for creation.
Also, USDA needs to restore effective implementation and enforcement of conservation compliance features of the Farm Bill. Weak enforcement now threatens the gains that had been made on reducing soil erosion.
5) How can Federal programs provide effective assistance in rural areas?
The majority of new jobs emerging in rural areas are non-farm related. Financial support for rural entrepreneurial and small business development is an important strategy to support rural areas. Examples of such support include (1) rural micro-enterprise grants programs that provide loans and technical assistance, and (2) individual development accounts as proposed in the New Homestead Opportunities Act.
The next Farm Bill should also support policies that invest in entrepreneurial activities on farms. The Value-Added Producer Grants program should be fully funded and restored. A reduction in current commodity payments will free up a considerable amount of money to increase USDA investment in rural development and conservation programs.
6) How should agricultural product development, marketing and research-related issues be addressed in the next farm bill?
The challenge here is the creation of new markets and direct marketing vehicles for agricultural products, which will mean the development of rural business infrastructure. To this end, the next Farm Bill needs to provide (1) Rural Business Enterprise Grants, (2) Value-Added Producer Grants, and (3) the National Research lnitiative for Future Agriculture and Food Systems. More than just listed in the Farm Bill, these programs need to be funded at generous levels and with explicit goals to firmly address the unique needs of small and medium-sized farmers, as well as beginning farmers and ranchers. These programs should also address the goals of environmental enhancement and rural community development.
USDA needs to demonstrate a real commitment to organic research and outreach. USDA should also include major funding for the new Farmers Market Promotion Program and Farm-to-Cafeteria program in its budget requests and endorse them as major farm bill initiatives. Finally, renewable farm-based energy is certain to become an essential part of future farm bills. This can create great opportunities for farmers and ranchers, as long as these are developed for the benefit of all farmers and ranchers, their communities and the integrity of creation.
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