farmgate: Conservation Programs: How Far, How Fast, In The 2007 Farm Bill?
Budgetary constraints and pressure from trading partners are expected to converge on the 2007 Farm Bill and, by many accounts, change its complexion toward reduced commodity payment programs and increased environmental stewardship. If that is the case, what types of conservation programs would be targeted for enhancement? That is the basis for some new analysis, designed to get farmers and landowners thinking about the new legislation and where they will fit into the future.
The analysis is offered by agricultural economist Thomas Dobbs of South Dakota State University. His research, Working Lands Agri-environmental Policy Options and Issues for the Next United States Farm Bill, indicates that price support payments are the bulk of USDA agricultural spending. Price supports were $16 billion for the 2005 crop year, but when emergency assistance and conservation programs were added in, the total was raised only to $23 billion. Dobbs says, “There is strong feeling in a number of circles that U.S. commodity programs continue to raise production above ‘free-market’ levels, thereby putting downward pressure on world prices and making it difficult for farmers in developing countries to compete.”
Dobbs uses the term “multi-functionality” to describe agriculture both in the US and in the European Union, which is not only food production, but also social or natural resources programs. The EU policy is to produce food but to keep farm families in rural areas and prevent unemployment pressures if they were to migrate to cities looking for work. In the US the term would apply to food production as well as soil and water conservation.
To improve the multi-functionality of US agriculture, USDA says there are a variety of conservation alternatives, which Dobbs evaluates:
1) Improving the current programs, in their efficiency and effectiveness through better targeting, consolidation of similar programs, rebalance payments with purposes, and enhancing energy management.
2) Putting greater emphasis on environmental stewardship payments which would neutralize World Trade Organization complaints about farm program subsidies by creating incentives for production practices achieve environmental objectives.
3) Creating private sector markets for environmental services. These would include recreational initiatives such as hunting and hiking, as well as allowing carbon sequestration through tillage practices to offset carbon releases by US industries.
4) Expanding and strengthening environmental compliance to ensure wetlands and highly erodible lands are better protected, as well as reducing nutrient leaching and runoff all by requiring compliance in order to collect commodity payments.
Dobbs says the various mechanisms for creating multi-functional agricultural programs that will meet international scrutiny could be the Conservational Security Program (CSP) of the 2002 Farm Bill, the Environmental Quality Incentives Program (EQIP) of the 1995 Farm Bill, and organic agricultural initiatives. However, Dobbs says there are weaknesses with those programs.
CSP: Dobbs says CSP was initially designed to assist all farmers develop whole farm conservation programs on a non-competitive basis. However, a lack of funding has caused USDA to develop mechanisms that ration the money and limiting efforts to selected watersheds.
EQIP: Dobbs says this program initially helped small livestock producers solve nutrient issues, but although it received a large appropriation in the 2002 legislation, its focus changed to large livestock operations, leaving less for the small producers. Dobbs says this could be resolved with better targeting of the funding to problems corrected.
Organic agriculture: While organic agriculture has been a major growth industry, expanding acreage by 71% from 1997 to 2003, the total certified organic acreage is only 0.2% of US crop acres. Dobbs says,” Widespread acceptance of the existence or importance of these (organic and sustainable agricultural) contributions does not yet exist in the broad U.S. food and agriculture policy community.”
Prospects for change are remote, says Dobbs, whether the 2007 Farm Bill is a brief extension of the current law, or a re-write of the 2002 Farm Bill, “It does not seem likely that there will be a fundamental reform in 2007 of the ‘commodity programs’ or a major shift of funds from the commodity programs to agri-environmental programs. Fundamental reforms and major funding shifts may come in time, but political forces are such that they appear quite unlikely to come about in legislation over the next year or so.” Dobbs says it remains to be seen if the future will hold any significant move in US agricultural policy toward “multi-functionality.”
Summary:
Multi-functionality of agriculture seeks to provide both food and social or natural resource benefits from the production system. The policy issues on the table for resolution focus on the required mix of conservation programs necessary to be of significant benefit, but also meet the pressures from trading partners to decrease commodity payments. While there are a series of alternatives that might meet the objectives, the history with them has demonstrated controversy and lack of wide support. While there may not be major steps toward multi-functionality in the 2007 Farm Bill, it remains to be seen if movement will come in the future.
Posted by Stu Ellis on October 23, 2006 5:56 AM to farmgate