MFA Incorporated
VIEWPOINT
Farm bill efforts must remedy agriculture's continuing slump
By Don Copenhaver, MFA Incorporated President and CEO

Two members of the MFA Incorporated corporate board recently served on the Farm Bill Task Force assembled by the National Council of Farmer Cooperatives. The National Council of Farmer Cooperatives is a trade association representing America's farmer-owned cooperatives. The two are Keith Schnarre of Centralia, Mo., and Ron Heins of Concordia, Mo. Keith is chairman of the MFA corporate board of directors. Ron is a member of our board's legislative committee. Both of these farmers spent considerable time and effort helping NCFC craft objectives and guidelines for the upcoming farm bill. NCFC then forwarded these objectives to the appropriate Senate and House members as well as the White House. As I have noted before, MFA is not a political institution; it is a cooperative business. But we cannot afford to ignore the political realities that affect the business of agriculture. Neither can you.

MFA is a member of NCFC, along with nearly 100 regional marketing, supply and credit cooperatives. These cooperatives, like MFA, are owned and controlled by the majority of America's nearly two million individual farmers. As NCFC details in a recent position paper to both Sen. Tom Harkin and Sen. Richard Lugar (two senators charged with leading efforts in developing farm legislation), the farmer's share of the consumer food dollar has shrunk to just 20 cents on the dollar. That's the lowest level ever. In addition, improved access to capital is a critical need today in agriculture. Access to capital is necessary to help farmers gain ownership in value-added activities beyond the farm gate, to invest in new equipment, to modernize and to meet regulatory requirements. The need for capital must be addressed aggressively.

Many other thoughtful concerns are outlined in NCFC's position paper. Of course, the importance of funding for the federal Market Access Program (MAP) also ranks high on NCFC's list. MAP helps U.S. agriculture maintain and strengthen its position in the global marketplace. Politicians and economists tell all of us in agriculture that global trade is mandatory for success today. If that's the case, then funding for programs specifically targeting opening and stabilizing markets must be mandatory. MAP was originally authorized in the 1984 Farm Bill. It has been an invaluable tool in helping farmers gain and keep access to foreign markets that continue to be crowded with foreign-government agricultural subsidies.

Simultaneously, we must all understand that it is both unnecessary and unwise to be in a hurry to pass farm legislation, especially at this time of crisis. Let's take our time and do it right. After all, the current farm law does not expire until next September. Let's shoot for thoughtful, deliberate consensus. Heaven knows 1996 brought us serious flaws that no one wants to repeat.

As you well know, there are as many farm bill proposals out there right now as there have ever been. Some of them are deserving of support--some are deserving of the waste can. Depending on the proposing group or political party, agriculture is faced with voucher plans, risk-management scenarios, conservation approaches, environmental decrees, flex plans, marketing assistance, revenue insurance, stabilization accounts and old-fashioned crop insurance. We have no shortage of ideas. What we are short on is consensus and political strategy.

To focus that strategy, NCFC's letter to both senators noted that farmer cooperatives exist for the mutual benefit of their farmer-owners "who choose to become interdependent to remain independent." As NCFC pointed out, farmer cooperatives are farmers. It's a relationship that allows farmers to improve their income, manage risk, capitalize on opportunity and compete in the global economy.

NCFC's positions, as developed with input from co-op representatives like Keith Schnarre and Ron Heins, detail a number of items under consideration for the upcoming farm bill. Chief among those are 1) changing USDA's business and industry guaranteed loan program to better meet the capital needs of farmers and their cooperatives; 2) building an equity capital fund with private sector participation; and 3) strengthening USDA programs in support of farmer cooperatives.

The Bush Administration is committed to finding new ways of structuring and funding a farm bill. It makes sense for all of us in agriculture to have as much input as possible. I urge all of our members to more fully participate in our democracy by joining and becoming active in the commodity organizations as well as Farm Bureau. Whether you choose to be a member of the soybean association, the corn growers, the cattlemen, the pork producers or any similar type of producer organization, these are good ways to make your voice heard.

None of us in agriculture care what the final outcome is called--the farm security act or the farm and ranch equity act. What does matter is that farmers and ranchers in this country have struggled too many years now with prices at historic lows. We cannot allow that to continue. These proud producers, the finest in the world by any standard of measure, should not have to rely on government emergency payments to stay economically viable.

 DEC 2001/JAN 2002
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