Published on 08/22/02

Farm leaders discuss new farm bill impacts

ATHENS, Ga. -- Agriculture policymakers, researchers and experts discussed how the recently passed 2002 farm bill will affect Georgia's economy and its No. 1 industry during the Symposium on the Future of American Agriculture here Aug. 15.

Exactly how the new farm bill will impact Georgia is up for debate. No one can know until the U.S. Department of Agriculture finishes writing the rules and regulations that will be used to implement the bill.

Several experts at the symposium said the regulations could be final by the end of this month.

Peanut Change

Certainly the biggest change for Georgia under the new bill is the way peanuts will be marketed. The new program replaces the old quota-system program, which guaranteed farmers a certain price for peanuts grown for the domestic market.

Under the new bill, quota growers will be compensated for the loss of the quota. The price of U.S. peanuts will become based more on world prices.

Many in the peanut industry have questioned the fairness of doing away with the old peanut program.

"Many people questioned the need for a new peanut program," said U.S. Sen. Zell Miller (D-Ga.). "But it's not that we had little choice. It was that we had no choice."

The old peanut program faced much opposition in Washington, he said.

"But I believe that the new (peanut program) will maintain U.S. peanut production for future generations," he said.

Under the new farm bill, the 2002 peanut crop will be worth about $275 million. And due to the quota buyout, the farm-level income for Georgia peanut quota holders will increase by $70 million each year for the next five years, said Nathan Smith, a peanut economist with the University of Georgia College of Agricultural and Environmental Sciences.

"Marketing will be key," for peanuts, he said.

Impacts All of Georgia

The farm bill only impacts agriculture, right? How could this effect Georgia's overall economy?

Agriculture is Georgia's No. 1 industry. On the surface, it generates about $8.7 billion annually. Georgia's overall economy is worth about $400 billion. Agriculture generates only about 2 percent of the state's economy -- on the surface.

But if you figure in the businesses directly and indirectly affected by agriculture, farming generates about $41 billion of Georgia's economy, said UGA Agricultural economist John McKissick.

In two-thirds of Georgia's 159 counties, agriculture is either the largest or second-largest single part of the economy, he said.

The new farm bill, through economic stimulus, will add about $10 million in new tax revenue each year for the state, McKissick said. It will add about $9 million in federal revenue each year.

Overall, he said, Georgia farmers and the state's economy should be positively affected by new farm bill as long as farmers keep planting the same acreage, especially in cotton and peanuts.

"It (the farm bill) will most likely improve the rural economies of Georgia," he said.

Cotton Counts

In 1998, cotton prices were 60 to 70 cents per pound, which was good for farmers. But, by 2001, due to glutted markets, the price fell to half that, said Bob McLendon, a cotton farmer from Leary, Ga.

But the cotton program under the new farm bill will help Georgia cotton farmers recover. He said the new program could bring as much as $100 million in new money to Georgia cotton farmers. "That means $100 million to Georgia's economy," he said.

Good for Conservation

The new farm bill, too, is "remarkable from a conservationist's perspective," said Craig Cox, executive director of the Soil and Water Conservation Society. "Conservation is now a major player in the farm bill and will continue to be in the future."

Under the new bill, he said, the United States will go from tens of millions to hundreds of millions of acres under conservation programs.

"Green payments" in the new bill will pay farmers for using their land in an environmentally friendly way.

Conservation could help support U.S. farmers in the future, Cox said. Taxpayers want more conservation programs. Farmers are perfectly situated, as stewards of their lands, to improve the U.S. environment, he said. And foreign farmers will find it hard to compete for those U.S. conservation dollars.

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