Farming in a New Century
Chicago Tribune, Chicago, Illinois
June 22, 2007

Former Agriculture Secretary John R. Block once said U.S. farm policy reform "should be evolutionary, not revolutionary." It certainly has been that: For 70 years farm subsidies have been largely unchanged, often providing government benefits to wealthy landowners. It's time for a revolution.

President Bush has proposed a dramatic change in farm policy. He wants to cap subsidies to individual farmers who make more than $200,000 a year. He would cut subsidies by 60 percent -- a savings of roughly $11.4 billion per year. Some of that savings would go to renewable energy initiatives.

The president's proposal is good, but Sen. Richard Lugar (R-Ind.) and four members of the House have an even better idea.

Their proposal, the Food and Agriculture Risk Management for the 21st Century Act, would phase out all farm subsidies in favor of something called Risk Management Accounts.

As subsidies are phased out, government funds would be placed in RMAs, something like Individual Retirement Accounts. Farmers could contribute up to $8,000 a year to their accounts, and they could draw from the RMAs in years when factors such as bad weather lead to a drop in crop prices. They would still be able to turn to the government for help when catastrophe strikes, such as a severe and extended drought.

But traditional farm supports would end, along with them the perverse incentives to overproduce staple crops that qualify for the highest government payments.

FARM-21 also would end what always has been a troubling bias in U.S. farm policy: Five crops -- corn, cotton, rice, soybeans and wheat -- get 90 percent of the $19 billion a year in U.S. farm subsidies. All farmers would be eligible for RMAs.

FARM-21 would cut U.S. agricultural subsidies $20 billion over the next five years and $55 billion over the next decade. (The House version would eliminate subsides in six years, the Senate in seven.) That revolutionary change would help to revive World Trade Organization negotiations that have been stalled, in part, because of international objections to U.S. farm supports.

FARM-21 faces a rough road, particularly in the House. There's a reason that farm subsidies have survived: farm state lawmakers desperately want to preserve them.

But they have to end.

U.S. farmers are the most productive in the world. They are smart, they are adaptable and they are resilient. They can stand on their own--and FARM-21 acknowledges that. It is the best agriculture reform plan to come out of Washington in a long time.