When the chairman of the U.S. House Committee on Agriculture recently asked a panel of Southeastern farmers where they might suggest making program cuts in the next farm bill, there were no takers.

“In our area, agriculture is on the verge of not existing anymore. We've become as efficient as we can be, but we still depend on the government's help to make a profit and to produce the food and fiber that our people depend on,” said Walt Corcoran Jr., an east Alabama cotton and peanut producer.

Corcoran was one of several farmers from Alabama, Georgia and Tennessee testifying at the House Committee on Agriculture's second field hearing to review the 2002 farm bill, held on the campus of Auburn University in Auburn, Ala. It is part of a series of hearings the committee plans to conduct around the country.

Fifteen members of the committee attended the hearing and heard from two panels of witnesses about a variety of farm policy issues, including specialty crops, peanuts, incentives for young farmers, payments, forestry, and crop insurance.

“These hearings are designed to give producers an opportunity to share their thoughts about what aspects of the current farm bill are working and which ones need to be modified,” said Bob Goodlatte, the Virginia Republican who serves as chairman of the committee. “Our producers are working on the frontlines. Their daily lives are driven by the farm bill. What improvements can be made given the financial constraints we face? A strong agricultural policy is vital to our farmers and ranchers to ensure that American agriculture remains competitive, and that our producers continue to provide their fellow Americans with a safe food supply.”

Later in the hearing, Goodlatte told the farmer panel that federal budget constraints could be a limiting factor in the next farm bill. “As we approach the 2007 farm bill, we're facing a large federal deficit. This situation may call for Congress to make very difficult spending decisions, and I wonder how we might prioritize the programs of the current farm bill, in general, and the commodity titles, specifically, including direct payments, marketing loans and counter-cyclical payments,” he said.

No one on the panel, however, was willing to concede any of the current programs. “We like all of them — they're all different and we'd like to keep them all,” said Jerry Newby, a central Alabama farmer and president of the Alabama Farmers Federation. “We'd like for you to continue to support agriculture in this country so we don't have to depend on others for our food and fiber. We feel there should be across-the-board cuts in all programs, not just in agriculture.”

USDA, said Newby, has stated that net farm income has fallen from $82.5 billion in 2004 to $71.5 billion in 2005. “Total cash crop revenues and government payments to producers have risen from $128 billion in 2003 to $138.6 billion in 2005. This shows that while farm income is down due to increased inputs and lower market prices, farmers are getting more of their income from the farm bill. This proves that without the safety net of the farm bill, our agricultural economy would collapse,” he said.

Farmers are told every year that budget cuts require reopening the farm bill, said Newby, and this causes a great hardship to farmers and their lenders.

“We in agriculture understand about budgeting and have always been willing to accept our fair cuts,” he said. “But, we think agriculture has paid more than its fair share in these budget cuts, especially the commodity, conservation and research programs. We just ask that cuts in the federal budget be done across the board equally. This farm bill has cost less than was originally projected by the Congressional Budget Office when it was enacted in 2002. We feel agriculture should get credit for these savings as well as preserving commodity baseline funding.”

East Alabama's Corcoran told the committee that payment limitations were important to his operation. “I farm in a family partnership. We raise about 4,500 acres of row crops, mostly cotton and peanuts. A significant majority of farmers oppose all forms of payment limitations, and I ask that you at least maintain current payment limits and eligibility requirements. Also, I ask you to realize the significant differences that exist in the size and structure of farming operations from one region of the country to another, and from one cropping system to another,” he said.

Corcoran said farming input costs had risen by at least 50 percent in the past two to three years. “Income has remained stable because we have had three pretty good years. But if we have another drought, as we did in the late 1990s, I'd hate to see what it would do to us.”

Except for setting the loan rate too high, farmers like the new peanut program, said Carl Sanders, president of the Alabama Peanut Producers Association. “The Southern Peanut Farmers Federation has met with other segments of the industry, including buying points, shellers and manufacturers, and each has indicated it is pleased with the 2002 farm bill. Each segment of the industry supported the peanut title of the 2002 farm bill.”

Sanders said the program also allowed producers to more readily enter peanut production. In Alabama alone, peanut production has expanded from 15 counties in 2002 to 32 counties in 2005.

But, he added, administration of the peanut program by USDA has not been as successful. He said domestic demand is healthy, but USDA has set the loan repayment too high, using data unrelated to the price for which other export nations are marketing peanuts.

“Our present export situation is directly related to the high loan repayment rate set by USDA. Although peanut state members of Congress have tried to assist growers in meetings with USDA, letter and inquiries in formal hearings, the rate has remained artificially high. This lack of response to competition from other origins has critically wounded our export programs,” said Sanders, who also farms in south Alabama.

Michael Hively, a Vidalia onion producer from Glennville, Ga., said that if the subsidies that are available to a “select few” crops extended to farm products that are heavily imported, there would be a shift from traditional row crops to a more diverse agricultural base that would be profitable and would balance import needs.

“In this day of bio-terrorism, we must strive to create this balance and break any dependency on importing our food before it starts,” said Hively.

Alabama Agriculture Commissioner Ron Sparks told the committee that creating a better environment for farmers to do business might entice younger generations to get involved in agriculture. “The perception right now is that if you go into farming, you might end up barely getting by from year to year. Too many times, that is the reality for Alabama farmers, especially after the last two hurricane seasons. I think we can help change that,” said Sparks.


e-mail: phollis@primediabusiness.com