How a Free Trader Can Support the Farm Bill
The Hill, Rep. Mike Conaway
As a fiscal conservative and free-trade advocate, I am often asked how I can support our current farm policy. I answer that question with a quote from President George Washington: "It will not be doubted that with reference either to individual or national welfare, agriculture is of primary importance." For me it is a matter of national security and a level playing field for American producers and consumers.
A stable and sound agriculture policy that promotes an abundant source of affordable food and fiber is arguably a very conservative position. You can look no further than our current energy situation to find the problems in giving the world market total control of our food supply. We simply cannot force consumers to absorb commodity shocks with regard to food. By promoting agriculture policies that support increased supply of food and fiber, we are also maintaining our ability to clothe and feed the American public.
The real question that needs to be asked is: Does this year’s farm bill give American taxpayers the most bang for their buck? This question has been addressed in hearing after hearing in the House Agriculture Committee over the last five years. America’s farmers are using subsides smartly and producing the most food possible on the land available.
Increased production on the same acreage available has allowed the American taxpayer to pay roughly the same price for food over the last few decades.
For example, let’s think about how the expected demand for corn-based ethanol has increased the price of a range of products from a slice New York pizza to the price of milk. Changes in demand for food and fiber impacts all Americans, but those at or below the poverty level will suffer the most.
There is little debate on what would happen to the price of basic commodities if farm subsides were eliminated. Prices would increase on nearly every product. Americans would have to spend more income on necessity items. The food stamp program that some love to hate due to horror stories of misuse would have to be increased significantly to accommodate higher prices, putting even more people on the taxpayer payroll.
Americans spend approximately 10 percent of their disposable income on food. This percentage is lower than any other nation, yet we spend less on subsidies than the EU, Japan, Indonesia, Canada, Turkey and South Korea. The U.S. also has some of the lowest tariffs on agriculture products in the world.
The American farmer is not afraid of competing on the world market, but the playing field must be leveled. Our friends in Europe have experience with food shortages and starvation. The production shortages of the past have prompted them to protect their agriculture production. Policies that protect European farmers ensure that those shortages will not happen again, but they also force American producers to compete at a severe disadvantage, especially in the case of non-subsided products.
Critics of current farm policy complain that large farms receive the vast majority of the farm subsidies. They paint a picture of plantation-style lifestyles, when in reality these large family farms support multiple families and the rural communities in which they reside. These farms are the most efficient and reliable producers, providing 50 percent of the entire U.S. agriculture output. It makes little sense to only provide subsidies to the smaller farms that are less efficient and make up a much smaller sector of the farm economy.
With the current subsidy structure, large family farms have the ability to purchase the necessary technology that allows them to be the best producers in the world. Few people are aware that the cost of a new John Deere harvester can cost well over a quarter-million dollars.
Rural America exists today because of current farm subsidies. Farmers pay for schools, roads and services to the local governments in rural America. Before we eliminate subsidies, an important debate needs to occur on whether eliminating subsidies and devastating rural America is best for the nation. What will need to be done to protect order in rural America if such policies were enacted?
The American farm economy would survive without farm subsidies, but rural America and the American farmer would not be the same. Large corporate farms would farm strictly based on profit and the commodity market. Large portions of our food and fiber would be imported from countries in Latin America with unstable governments, and the rural economy as it exists today — and how it has existed for the past 200 years — would come to an end.
President Washington recognized the "primary importance" that agriculture plays in our national and local welfare, and members of Congress need to recognize the role and importance of agriculture in our nation.
Conaway is a member of the House Agriculture Committee. He represents 36 counties in West and Central Texas.