Published on 05/02/02

'Safety Net' Better in New Farm Bill

A new farm bill is complete and nears approval for the 2002 crop season. Georgia farmers hope this new deal can correct past mistakes and hand them a better way to deal with a sluggish U.S. farm economy trying to ease its way into a global market.

"The Farm Security and Rural Investment Act of 2002," long debated by House and Senate conferees, has now been published. It must be passed by both chambers and then signed by President Bush before becoming law.

"From what we can see, this new bill will provide for a much better income safety net for farmers," said Don Shurley, a cotton economist with the University of Georgia College of Agricultural and Environmental Sciences.

Out with the Old

The new farm bill replaces the controversial "Freedom to Farm Act of 1996," which sought to wean farmers off government subsidies and into world competition.

This new six-year farm bill is priced at $170 billion, more than double the government's spending for the 1996 farm bill.

"This shows that the government is willing to support U.S. agriculture," said Nathan Smith, a CAES peanut economist.

Major Change

Peanut growers face major changes in the new farm bill. Georgia produces the lion's share of the total U.S. peanut crop.

In the past, the U.S. government regulated, through a quota system, how peanuts were sold. Under the new farm bill, peanuts will be treated much like other U.S. commodities. They'll be subjected to world competition. Current quota holders will be compensated for the loss of the old pricing system.

But Smith said Georgia peanut growers can handle the pressure.

"The new farm bill will put our peanuts within about 5 cents per pound of the world price," he said.

U.S. manufacturers, he said, would be willing to pay the small difference for U.S.-grown peanuts.

"The peanut grower that will survive under this farm bill will be the one with a low cost of production ... who can find a niche market for certain peanut traits (manufacturers want)," Smith said.

By the Rules?

The old farm bill sought to comply with world trade rules and take the government out of the business of controlling the supply of major U.S. commodities, such as cotton, wheat, corn and soybeans.

It did just that, Shurley said. But prices plummeted, with no adequate safety net to catch the farmers. The government had to pay out record ad hoc payments to keep many farmers in business.

Engineered into the 2002 farm bill are mechanisms to compensate farmers during times of low prices and let things alone when prices improve. The new farm bill also increases spending to compensate farmers for improved farm conservation and environmental practices.

U.S. Rep. Saxby Chambliss (R-Ga.) was the only member of the Georgia delegation to serve on the farm bill conference committee.

"It's going to be a better deal than you've had," Chambliss told about 70 cotton and peanut farmers in Doerun, Ga., April 26. "You guys are going to be happy with the numbers on peanuts and cotton (and other major U.S. crops)."

But already, other countries are questioning whether or not the new farm bill complies with the World Trade Organization. They threaten to protest the new bill.

Brad Haire is the former news editor with the University of Georgia College of Agricultural and Environmental Sciences.