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Safety
Net for Farmers May Be Improved
AUBURN, APRIL 5---The
proposed federal budget allocation for agriculture, now awaiting
action in the U.S. Senate, offers some improvement in the safety net
for U.S. farmers. An agricultural economist with the Alabama
Cooperative Extension System says the proposed increase in the budget would help
eliminate some of the wrangling that goes on in the Congress over
where money will come from for disaster funding and agricultural
programs.
Poultry farmers and
greenhouse operators have been hard hit in Alabama because of high
energy costs, while high fertilizer costs are forcing many farmers
to rethink their spring planting. Dr. Jim Novak points out that the
proposed budget would provide funds in the current 2001 fiscal year
in anticipation of the lost income from high fuel and fertilizer
costs and the forecasts of continued depressed commodity prices.
 Novak notes the budget
also leaves room for additional tax reform, such as expanded income
averaging provisions and creation of Farm And Ranch Risk Management
(FARRM) savings accounts. With a FARRM account, a farmer could put a
percentage of their farm income in a tax-deferred savings account
that could be drawn on in hard times.
"FARRM accounts are
a great program if farmers have money to put into them," says
Novak. "But if a farmer depletes his account because of a bad
season and that's followed by another bad season, then he is still
in trouble. There will still be a need for other means of risk
protection."
Representative Larry
Combest, R.-Tex., chair of the House Agriculture Committee addressed
this need during debate on the budget.
"As it should have,
Congress has stepped in with emergency economic assistance in each
of the last three years, and many farmers are still in business
today because of that help. But the need continues. It is time to
stop ad hoc assistance and move to a more permanent solution that
producers, their bankers and their suppliers can count on. And this
can be done in a way that provides more fiscal discipline that will
benefit the taxpayer
while providing more predictable support to the agricultural
community," said Combest.
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SOURCE: Dr. Jim Novak,
Extension Agricultural Economist, Alabama Cooperative Extension
System, (334) 844-3512
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