Albion Monitor /Commentary

Congressional Budget Spells Ruin for Family Farms

by A.V. Krebs

(PNS) WASHINGTON, D.C. -- If the Congressional Budget Reconciliation Act now awaiting presidential action is enacted, the historic American farm family will finally vanish.

For most family farmers, the Act's Agricultural Market Transition Program translates into a "transition" right out of agriculture, charges Kathy Ozer of the National Family Farm Coalition. Sen. Ken Conrad (D-ND) uses more graphic terms. "I've likened the Republican budget plan to a neutron bomb," Conrad says. "You drop the bomb, the buildings remain, but the people are gone."

Agriculture itself, of course, will not disappear. What will happen instead is the total transformation of American farming along corporate lines. As Rep. Charlie Rose (D.-NC) says "America will see the largest transfer of wealth to multinational agribusinesses at the expense of the American family farmer ever."

Family farmers are convinced that national policy, as well as corporate intent, has targeted them to disappear

Even as Republican budget proposals cut $58 billion in Medicare in rural America and a $45 billion in Medicaid, the Reconciliation Act mandates a $13.4 billion cut in agriculture over the next seven years. Most of the cuts would affect family farmers who already suffer from a poverty rate twice that of their urban neighbors.

For decades farmers have been plagued by low market prices for their crops. Between 1982 and 1993, those prices rose only 7.5 percent, yet what they had to pay for agricultural inputs went up 23 percent, more than three times what they earned from selling their crops. Under the Reconciliation Act, declining farmer support payments over the next seven years will worsen the family farmer's lot.

Family farming has always been a hard way to make a living. And because it is getting even harder, more and more people are fleeing farming for city life. Between 1987 and 1992 consumer prices for 14 commonly purchased grocery items went up 14.2 percent. Yet what the farmer got for them went down 15.3 percent. No surprise that during this same period the net annual loss of farms in the U.S. amounted to 32,500 units.

Now family farmers are convinced that national policy, as well as corporate intent, has targeted them to disappear. In the past, for example, loan rates were reasonable so farmers could easily borrow to buy material inputs for their operations. Loans were seen as a supportive floor encouraging farmers to keep on producing bountiful harvests. Under the Budget Reconciliation Act, loans will be offered as a ceiling beyond which nothing more can be borrowed.

On the other hand industries that process the farmers' crops so they can be sold in supermarkets to consumers at "super-low prices" are raking in healthy profits. Between 1990 and 1995, the food, beverage and tobacco processing industries realized a return on their investments of 17.9 percent, making them the nation's most profitable industrial sector.

Farmers during the same period averaged only a 1.98 percent yearly return on their investment. However, as agribusiness and other forms of corporate farming finish their takeover of America's farmlands, their profits will be high as well.

"The point is to maximize production at all economic and environmental costs"

Almost lost in the language of the current budget legislation is a provision to repeal both the 1938 and 1949 Agricultural Adjustment Acts and effectively and permanently dismantle many of agriculture's historic and fundamental conservation and price structure mechanisms.

The Reconciliation Act's provisions are not a new agenda. "It's a rehash of the fencerow to fencerow agenda of the 1970s and 80s," says Kathy Ozer: "The point is to maximize production at all economic and environmental costs."

If the Reconciliation Act's produce-or-die message doesn't drive family farmers to exhaustion, other bills now pending may finish off the job. Rural America's infrastructure is destined to be radically altered with the disappearance of many air, rail and highway transportation subsidies vital to farm community economies.

Today many individuals and businesses in rural America rely on affordable phone services for access to emergency services as well as for making business decisions. With pending deregulation, corporate telecommunication providers will feel no incentive to offer new advanced services in rural areas where costs might be high and profits low.

As Kathy Ozer sums up, under the slogan of "freedom to farm" the new approach is being touted as "a smooth market transition for American agriculture." What it will lead to in fact is the economic ruination of farm families and the structural devastation of rural communities.

A.V. Krebs, a veteran analyst of rural America, is author of "The Corporate Reapers: The Book of Agribusiness" (1992). This commentary first appeared in Jinn, the magazine of the Pacific News Service.

Albion Monitor December 21, 1995 (

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