LITTLE ROCK, Ark. — The Arkansas State Fair played host to the 31st stop on USDA’s “farm bill listening tour.” Held in a hall next to several pungent horse barns at the north end of the fair’s busy midway, the meeting began with a near full house singing the national anthem. If not in the thick of a late harvest, even more producers would have joined in.

Standing in for Agriculture Secretary Mike Johanns, Deputy Secretary Chuck Connor didn’t take the rhetorical beating his boss took in a Little Rock farmer meeting in June. At least some of that had to do with the format — those testifying were limited to six listed topics and two minutes of speaking time.

Still, Connor received several jabs and heard well over two hours of emotional pleas and blunt suggestions regarding trade and farm legislation. He also heard from a handful of rural bankers warning of serious financial difficulties in the short-term.

The meeting begins

Democrat Sen. Mark Pryor of Arkansas, who introduced Connor, asked him not to waste the crowd’s time. “Quite frankly, if you’re not going to listen and the (Bush) administration knows what it’s going to do with the (2007) farm bill anyway, we should just pack up and go home.”

Pryor said some in the Bush administration want to see “radical” changes to programs in the next farm bill. Their reason is a belief “farm conditions have improved since 2002. I’d like to see a show of hands from all the people here who think farm conditions have improved in Arkansas since 2002.”

As Connor scanned the crowd, no hands were raised.

“In addition,” continued Pryor, “I read that some in the administration want big cuts in farm programs because they’re going to advocate more open markets with our trading partners. How many times have we heard that?...I hope the administration doesn’t rely on some vague promise out there about open markets and sell our farmers down the river.”

A “raw fact,” said Pryor, is Bush “wouldn’t be president today had it not been for farmers across this country. He wouldn’t. He carried rural America in 2000 and 2004 and I sincerely hope, if for no other reason, he’d show a debt of gratitude to the people who sent him to the White House — that he’d remember them.”

Connor then took the microphone and announced the entire state had been declared an agriculture disaster area. “This will make producers eligible for very low interest rate disaster loans through FSA.”

He also announced USDA is releasing $1.7 billion in 2006 for voluntary conservation programs. “These enable producers to do a better job of conserving natural resources for the next generation.”

President Bush is “paying close attention to the feedback we’re getting from these sessions. He asks (Secretary Johanns) and me about this often.”

During the tour, Connor and colleagues are seeing “significant differences of opinion” on the farm program. “In the Midwest, producers come to the microphone time after time urging, almost demanding, payment limits. Now, I know that isn’t a message I’m going to get here today. But in other regions of the country, the message is 100 percent opposite.

“Based on the feedback (we’re receiving, Johanns recently said) the concerns of farmers and ranchers are influencing what we’re thinking about farm policy. That’s the truth. He specifically noted concerns about farm support programs and (the fact) that one-third of the producers receive the greatest benefit from the farm programs and the largest of those farms get those benefits.

“That’s a controversial statement down here and I know that. He also pointed out that (we’ve heard from) that third of producers saying, ‘That’s fine. Don’t change it. We like that structure.’

“Ultimately, the nation must decide whether to continue to rely on the existing policy structure or whether to attempt some changes.”

Testify

Producer testimony opened with Stanley Reed, president of Arkansas Farm Bureau and a cotton farmer from Marianna, Ark. “We cannot reduce our domestic support for agriculture until we see we have meaningful access to world markets and reduction of trade barriers around the world.

“There’s been a lot of talk about what will be done with the WTO. But my biggest concern is we (lie) down and give up all the leverage our farm programs (now provide) and not get the access we need.”

Connor said such worries are unnecessary. “If market access isn’t given, the (current WTO) proposal will come off the table. It’s been offered totally contingent on (foreign) markets becoming available to U.S. rice, cotton, soybeans and other commodities in this state.”

Many speakers were upset with the lack of nuance regarding oft-cited statistics showing a small percentage of producers receive the vast bulk of farm program money.

“You made the statement earlier that a third of the farmers get the majority of benefits,” said Ray Vester, a rice producer from Stuttgart, Ark. “Some people say (that third) is the wealthy group, but I’d like to provide a few more statistics.”

The farm program is fine as it is, said Vester, because benefits go to those who produce the most.

“An example of that is 38 percent of all farmers produce 92 percent of America’s food and fiber. They receive 87 percent of farm program benefits. That’s a bit less proportionally than what’s produced.”

To highlight its importance to the country, Vester suggested the next farm bill be renamed the “Food Security Act.”

John Landry, a farmer from southeast Arkansas, backed Vester. “Current payment limits (shouldn’t be) made any more restrictive. Most farming operations secure financing for annual production as well as incur long-term debt for equipment and land. Changing limitations and eligibility make financing even more difficult to obtain.

“(Some say) big farmers get the majority of benefits. However, big farmers receive those payments only because they’re producing more and incurring greater financial risk.”

The family farm

Producer Tommy Hoskyn said he was in a meeting years ago with Sen. David Pryor (Mark’s father). “We were talking about (farm bills), and I asked him what the definition of ‘family farm’ was. He replied, ‘I have no idea. It just sounds good when you’re making a speech to get up and beat on the podium and say we’re going to save the family farm.’

“I would suggest in most cases, a family farm in the Mid-West looks much different than a family farm in the South.”

Southern crops and how they’re grown “are much different from most of the Midwest. Not only are our input costs much higher but (farming here) also requires more labor and equipment. This is particularly true for rice and cotton.”

The Hoskyn farming operation is a partnership between four family members. Pooling resources provides enough acres to have an economical operation.

“Our farm also supports three full-time and some part-time employees. If we divided our farm into three or four smaller units, none would be large enough to survive. They’d probably end up just part-time farms.

“While I have no problem with part-time farms, we won’t feed the world with (them). Farming is no different from any other business in this country — we’ve had to get bigger to survive. But that doesn’t mean we aren’t a family farm.”

Hoskyn said most have grown weary of groups like the Environmental Working Group (EWG) “attacking our farm support programs while they enjoy the cheapest, safest and most abundant food supply in the world.”

Randy Veach, farms cotton, rice and soybeans in Mississippi County, Ark., with his sons. He said the 2002 farm bill is working well.

“The way we can get young people to stay and be involved in agriculture is to make it profitable and have a safety net provided. They’re in the most productive years of their lives, so we’ve got to make it profitable enough for them to come and continue to farm.”

The rising cost of fuel, fertilizer and other inputs has caused “the most financially (difficult) year we’ve ever had. It’s going to be a year when even decent production won’t be profitable. Dismantling the marketing loan program would be disastrous to agriculture in Arkansas. We couldn’t survive such.”

Other issues

The Cuban rice market continues to be an export target for struggling rice producers. In 1962, the United States imposed sanctions on Cuba, the largest market for U.S. rice at that time.

“The United States has a clear geographic advantage in supplying that island,” said John King, Phillips County, Ark., rice, cotton, soybean and corn producer and chairman of the USA Rice Council. “Recent industry estimates suggest Cuba imports more than 600,000 tons of rice annually.”

While the United States has made headway in regaining the Cuban market, “its long-term potential remains threatened by existing sanctions and recent efforts to tighten exports...On July 29, the U.S. Treasury Department clarified its rules (regarding) trade with Cuba. However, legislation is still needed to remove the current restrictive rule that unnecessarily, and unfairly, over-regulates trade with Cuba.”

The debate over agricultural policy should be redirected a bit, suggested Jerry Lee Bogard, a producer from Stuttgart. “The day has come when we must accept the fact that a domestic farm policy oftentimes flies in the face of foreign policy. The correlation between the two — the net result — is national food security.”

Trade agreements bring foreign competitors’ products “into our country most often duty-free, tariff-free and inspection-free. Many of the production (methods) our competitors adhere to today were outlawed in this country 25 years ago — heavy metal fungicides, DDT and other things are used regularly. They’re allowed to bring them into this country and our consumers know not what they consume.”

Bogard described himself as a free-trader, “but I’m also a realist and realize we can’t continue fooling ourselves. If I was to put the food product on the shelf that my competitor can freely do and (was found) to have used the same compounds, my crop would be quarantined and I would likely be arrested for bio-terrorism.”

Another topic hit upon was the relationship between landowners and renting farmers. “My general philosophy is the landowner and farmer ought to be able to negotiate what they want,” said Bill Bristow, a landowner from Jonesboro, Ark. “As a general rule, cash rent is set based on the expectations of a prime year and good harvest.

“This year, the farmer who paid cash rent is going to be in a lot worse shape than the one who was on a crop share. In addition, requiring cash rent is a significant barrier in getting young people farming.”

In 2002, “we introduced the issue of means testing. What we’ve done by means testing is force certain landowners to go to cash rent.”

Bristow said there would be more of that due to “the rhetoric of payment limitations. When (that happens), the landowner will do well but the farmer will be hurt.

“Under the farm bill there’s no policy reason for the unintended consequences of forcing people — because of off-farm income or limitations — to go to cash-rent when everyone would rather do a crop share. I wish you’d look at that.”

FSA offices

Connor showed a flash of irritation after several suggestions — followed with applause — that plans to close or consolidate FSA offices be shelved.

“Believe me, I know this is an applause line out there,” said Connor whose father farmed and worked part-time in an AFCS office. “I spent a lot of my childhood with him in those offices, going through the maps, sorting through the acreage. I have very fond memories of those days.

“However, in the current FSA we have offices where it costs $2 of administrative expense to deliver $1 worth of benefit. That’s not right.

“The simple fact is we’ve analyzed situations where offices are within 20 miles (of another office). We’ve said, ‘If you’re a high-cost office within 20 miles of another office, let’s see what the economics are. Not that we’re going to close it — let’s just look at it.”

The U.S. taxpayer is owed “at least” a review of FSA offices. “For crying out loud, give us a chance to at least look at it. Some of these offices are in areas where development has made the county urban. They aren’t even rural anymore. But the (FSA) office is still there. It’s not right.”

The “death” tax

An applause line that didn’t bother Connor was the repeated request to do away with the inheritance tax.

“We don’t like what’s happening,” said Robert Reed, a small family farmer and member of the Libertarian Party and the National Taxpayers Union. “The taxes are too high on our property. It’s not fair. My grandchildren will not be able to afford my land in the state of Arkansas due to the inheritance taxes. We need to get rid of the inheritance taxes on all farms.”

Connor replied, “President Bush has time and time again made reference to the tax and said, ‘Death shouldn’t be a taxable event in this country. It should not be.’ Congress has an opportunity to put an end to this permanently.”

Pryor said he and Sen. Blanche Lincoln, D-Ark., support a Senate proposal that would completely eliminate the estate tax for family farmers and small businesses.

“Realistically — and don’t kill the messenger — given Katrina and other budget items, the vote on this probably won’t happen until next year,” said Pryor. “We don’t know how it will come out. The most likely scenario in the Senate is you’ll see a compromise. The compromise will probably completely solve the problem for about 95 percent of the people in this room — completely solve it. It will greatly help the other 5 percent.”

Bell on the bill

The current farm bill has its origins in the 1985 Food Security Act. “That was the year the marketing loan program was introduced for cotton and rice,” said Richard Bell, head of the Arkansas Department of Agriculture and former CEO of Riceland Foods. “(It was) a radical move that changed the structure of farm policy.”

The program was introduced to make cotton and rice competitive in world markets. It worked well, said Bell, and spread to other crops. “It’s the heart of agriculture policy.”

Concerning current trade negotiations, Bell endorsed the five points in a letter recently sent by Sen. Saxby Chambliss, R-Ga., to Secretary Johanns and U.S. Trade Representative Rob Portman.

(For more information, see http://deltafarmpress.com/news/101205chambliss-letter/index.html).

“I consider your proposal unrealistic,” he told Connor. “And that’s from someone who’s been in this for a long, long time.”

Bell then pointed to rice. “I don’t know if you realize it or not, but we haven’t increased the loan rate for rice in 17 years. Very few people haven’t had a raise in 17 years.

“I must admit I was an advocate of the counter-cyclical payment. I like the old deficiency payment we had — it provided us protection we didn’t have otherwise.

“But the schedule of payments we ended up with is a disaster. You don’t know when you’ll get it. It could be a year after the crop’s ended.

Summing up the proceedings, Bell told Connor, “When you get this far south, we look at the world differently than they do in Iowa, Nebraska or Indiana.”

e-mail: dbennett@primediabusiness.com