The Pros and Cons of Ag Subsidy Cuts

Two Kansas farmers weighed in recently on the merits of subsidy cuts.

Ottawa County farmer Steve Baccus, who serves as president of the Kansas Farm Bureau Federation, disagrees with those who contend that farm decisions should be dictated only by market forces.

“Unfortunately, it’s not that simple,” Baccus argues.

“Federal subsidy payments are tied to market prices,” he says. “Market prices are tied to export demand. Export demand is wrapped up in international trade policy. International trade policy is arrived at in painstaking global negotiations. Every country involved in those negotiations has an agenda.”

There’s also the fate of rural communities to consider. “Nowhere,” he says, “is this more evident than in a state such as Kansas, where the health of so many of our small, rural communities is dependent on local producer trade.”

Jim French, a Reno County farmer and a communications specialist for the Kansas Rural Center, disagrees, citing reports from the USDA’s Economic Research Service concluding that “despite decades of farm program payments, economic researchers have been unable to establish that these payments help sustain farm communities.”

Furthermore, he questions whether the bulk of subsidies actually are recycled back into farm communities. Rather, he says, it “travels to the companies that sell fertilizer, manufacture equipment, control the genetics and handle the grain.”

Citizens instead “should demand that public dollars support public goods: clean air and water, soils that don’t lead nutrients and pesticides into the Gulf of Mexico, crop surpluses that are placed in secure reserves and not dumped on the world market.”

Posted by Jim Langcuster at February 16, 2005 02:55 PM | TrackBack