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End of Farm Subsidies Could Actually Boost Farm Income in Some Counties

http://www.montereyherald.com/mld/montereyherald/business/12433761.htm?template=contentModules/printstory.jsp

Monterey Herald

Aug. 20, 2005

Good, bad news if farm funds end Don Curlee Agriculture at large Spokesmen for California agriculture for decades have contended consistently how insignificant federal support payments are in the totality of the state's agricultural economy.

Recent research extends that point emphatically, at least in the case of one prime agricultural county.

A hypothetical situation created by four University of California researchers indicates that ending farm subsidies will result in an economic boost to Tulare County, the nation's second largest agricultural unit, but a downer for Colusa County's economy.

Without the federal payments given to rice and cotton growers, Colusa County's economic activity could drop by $73.5 million annually.

Cotton appears prominently in both economies. The researchers assume that a lack of subsidies will cause a significant amount of acreage in Tulare County to change from cotton to alfalfa. Also, hay production goes hand in hand with the county's position in a large dairy industry.

Surprising to some, the researchers calculated that alfalfa production generates almost seven times the number of agricultural jobs -- and more than three times the total jobs -- that cotton generates for every million dollars of output.

The researchers think dairy farm production will continue regardless of what the feds do. The dairy industry receives federal support, but the $10.2 million received in 2000 was less than 3 percent of Tulare County's total farmgate production that year -- not much more than a drop in the milk bucket.

Tulare County growers can switch from cotton to alfalfa production with relative ease, but rice growers in Colusa County don't have that luxury.

The area's heavy clay soils required for growing rice are not easily converted to other crops. That's why the area's economy could hurt from losing subsidies.

The conclusion that farm income will be reduced in Colusa County if rice subsidies end is based on the assumption that any alternative to rice will be less labor intensive, lowering the economic threshold.

The researchers' report was published in Update, a publication of the university's Agricultural and Resource Economics Department and the Giannini Foundation.

Some farmers might wonder if the researchers know something they don't about the termination of farm subsidies. It doesn't seem that the payments are in immediate jeopardy, but they are always open for discussion, particularly in political circles.

Such discussion always creates heat. When used cotton harvesters start flooding the market and the movement of hay handling equipment picks up, we'll know that the political smoke is about to erupt in flames.

Don Curlee is a freelance writer from Clovis who writes about farm-related topics throughout California. His column appears Saturdays. Please mail queries to "Agriculture at Large," c/o The Monterey County Herald, P.O. Box 271, Monterey 93942. http://www.montereyherald.com