Congress needs to get serious about farm-policy reform
Muncie Star Press
July 31, 2007

A new farm-policy bill making its way through Congress has created great interest in Indiana, mostly because it would disrupt the state's plan to reform and privatize the system for screening food-stamp applicants. That is unfair, say state officials, because it would cost Indiana as much as $125 million to break a contract with a private company, IBM, which is supplying the mechanics to modernize the welfare system. A new IBM center at Daleville is part of that plan; fortunately, IBM is pushing ahead on its development.

But the farm-bill debate involves far more than its potential impact on Indiana's welfare system. The nation's basic crop-subsidy policy could be at stake, if Hoosier Sen. Richard Lugar has his way.

Lugar, who still operates a family farm in Marion County and is senior Republican on the Senate Agriculture Committee, knows more about farm policy than most in Congress. Trouble is, his knowledge and interest in reforming that policy competes with congressional tendencies to avoid changing complicated programs, because that would involve too much work and endanger relations with Big Agriculture constituents and campaign contributors.

Lugar, to his credit, wants to replace current crop subsidies with a revenue-insurance program and savings accounts that farmers could build up when times are good and draw on when they're not.

Currently, producers of corn, soybeans, wheat, rice and cotton get fixed payments based on their land's past production. They also may collect additional funds from programs tied to fluctuations in market prices and for environmental programs.

Supporters of Lugar's plan say it has the advantage of costing taxpayers less while freeing up more money for conservation, nutrition, rural development and renewable energy programs. Reforming U.S. farm policy is also viewed as beneficial to this country's attempt to liberalize global trade agreements.

In a recent column praising the philosophy and substance of Lugar's approach, columnist George Will correctly pointed out that the current commodities program perpetuates an entitlement mentality born in New Deal politics in the 1930s. Under this plan, Will said, producers of the five commodities get about 90 percent of the total subsidies.

"This is a perverse incentive for overproduction of the five, which depresses prices, which triggers federal supports," Will said.

An example of how this can go awry is cotton production, which makes up 2 percent of the nation's agricultural output, yet sucks up 22 percent of the federal support payments.

Lugar should not be viewed as merely a voice crying in the farm wilderness. His farm reform proposals have attracted much support from other groups seeking change, including many producers (some in Indiana) who now get little-to-no federal help.

Changing the system will be no easy task, but as Will pointed out in his column, many thought that basic welfare reform was impossible until 1996, when Congress finally woke up to the need.

Until Congress realizes that farm subsidies amount to agricultural welfare, the nation will continue to be saddled with an outdated policy that works improperly and whose inequities amount to a national scandal.