Seize Chance to End Subsidies
Wisconsin State Journal, Madison, Wisconsin
June 5, 2007

If Wisconsin agriculture is to prosper over the next decade, it is imperative that federal farm policy pursue a new direction.

A bipartisan proposal to be introduced on Capitol Hill, perhaps as soon as this week, offers that direction.

The plan, co-sponsored by Rep. Ron Kind, D-Wis., would gear U.S. farm policy for a new era shaped by the global economy, growing demand for biofuels, a sense of urgency about conservation, and an overriding need to rein in federal spending.

Called the Farm and Agriculture Risk Management for the 21st Century Act - FARM-21, for short - the proposal should guide Congress as it prepares the 2007 farm bill, which will govern agriculture for the next five years.

At stake is the safety net that protects the nation's farmers from steep declines in the prices for their products. Consumers also depend on the net to ensure a consistent supply of food at reasonable and stable prices.

For the past 70 years the U.S. farm safety net has been dominated by a flawed system of subsidies, supply and price controls, and import restrictions.

The subsidies have encouraged too much production, which depresses prices, which requires more subsidies in a cycle now costing taxpayers more than $20 billion a year.

Supply and price controls and import restrictions have distorted markets and limited foreign competition, increasing consumer costs, undermining Third World economies and producing retaliatory barriers against U.S. exports.

FARM-21 proposes a radical departure that benefits farmers, taxpayers, consumers and international trade.

Under the plan, subsidies would be phased out, replaced by a more cost-effective method of protecting farmers.

At the center of the proposal are risk management accounts, which the government would fund. Farmers could tap the accounts when their revenue declined or to buy crop or revenue insurance.

The plan saves $55 billion over 10 years. The plan would use about $20 billion of savings to reduce the federal deficit. Most of the remainder would finance biofuel development, conservation, rural development and nutrition programs.

Moreover, risk management accounts would help bring U.S. farm policy in compliance with global trade agreements, which are hurt by subsidies. That would help lead the world toward freer trade, benefiting U.S. exports.

The redistribution of federal aid resulting from FARM-21 would require adjustments. Wisconsin farmers would lose crop and dairy subsidies worth nearly $3.2 billion to the state over the past decade.

But it's time for American farmers to produce for market demands, not to collect a subsidy check.

It's time for Congress to incorporate the principles of FARM-21 in this year's farm bill.