Farm Bill Proposal is a Good Start

The Bush administration last week released its proposal for the next Farm Bill, the nation’s quinquennial policy on all things agricultural and many things rural. And while it’s safe to say that no one in Congress or the ag community hailed it as the be-all and end-all, most greeted it as a good start. Indeed, the bill calls for progress on several fronts.

To correct for the historical skewing of subsidies to large farmers (many of whom don’t need help and some of whom aren’t farmers at all, but rather absentee landowners), the bill caps payments at $360,000 per farmer and makes ineligible any farmer with adjusted gross income of $200,000 or more. (Note that 97.7 percent of all U.S. tax filers fall below that level.) Currently, farmers can get payments for more than one farm and the income limit is $2.5 million—set by the so-called “Scottie Pippen Rule” for the multi-millionaire NBA star who got payments on land he owned. Moving from $2.5 million to $200,000 takes some 80,000 farmers off the rolls. That’s a politically risky move. But according to the Agriculture Department, only 25,000 of them got payments last year anyway.

The changes will save money. That’s good. More important, however, is the shift of payments away from those who don’t need the help and toward those who do. On top of that, the changes are a step toward bringing our farm policies into compliance with our trade treaties and giving a much-needed shot in the arm to the current round of World Trade Organization negotiations, which just reopened after stalling out last year.

In recognition of the short shrift given to the growers of fruits and veggies--who get no payments under the current system despite producing half of the nation’s ag sales--the bill provides nearly $5 billion for research and the purchase of more of their products for school lunches.

Surprisingly enough for this administration, the bill also ponies up some money (though not enough) to conserve precious natural resources by improving water quality and preserving wetlands.

On the energy front, which many thought would drive the bill, the administration calls for $1.6 billion to help ramp up renewable energy. The money will pay for research and development, improvements in energy efficiency and construction of alternative energy projects. A significant portion of the money is aimed at the development of cellulosic ethanol—the (latest) holy grail of energy.

Overall, the proposal is reform minded and even a bit forward thinking. It’s a good start. But it’s only a start. Particularly when it comes to the rural development title.

While many of us expected something big and bold in the rural development title, that isn’t what was delivered. To its credit, the administration increases funding for Critical Access Hospitals, which truly are critical to the health and economies of rural areas. It also proposes making a $500 million dent in the nation’s $2 billion backlog of rural water and sewer needs. Finally, it calls for “consolidating and streamlining” various programs and functions to—ostensibly—make it easier for communities to get the help they need from a complex maze of federal programs. (Let’s hope consolidating and streamlining don’t turn into cutting and eliminating.)

Missing from the proposal, however, are the things most often cited as crucial to the revitalization, and perhaps even survival, of rural America. First and foremost is the need to promote entrepreneurship.

Chuck Hassebrook, Executive Director of the non-profit Center for Rural Affairs, calls the lack of entrepreneurship programs the “real gap in USDA’s portfolio” and the “gaping hole in the administration’s proposal.” Entrepreneurship—starting companies and growing your own jobs—is where most opportunities in rural America lie, said Hassebrook.

Also needed are efforts to get rural communities working together to share resources and achieve economies of scale; get philanthropies investing in rural America (a mere pittance of the nation’s vast philanthropic assets go there now); identify and use the tremendous assets and equity that rural America does have; and overhaul governing structures and practices that impede all of the above.

Why the administration left these ideas out is anybody’s guess. Here’s hoping Congress—which actually writes the Farm Bill--will put them in.