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Can the USA Farm Bill for 2007-2012 Be Greened?

Urban Lehner, Editor-in-Chief at DTN, wrote an excellent piece on Friday regarding the 2007 Farm Bill debate and the increasing focus on "green" payments.

"But if you've followed the 2007 farm bill debate thus far, you know what I mean. Green is a recurring theme, if not the official color. Many of those in the know think the 2007 bill will redirect farm payments away from commodity programs, which aim to support farmers' incomes, and toward conservation programs, which pay farmers to protect the environment," Mr. Lehner said.

"Indeed, some conservation payments would be 'doubly green,' for they would also qualify for the World Trade Organization's 'green box'  category of farm payments that don't distort agricultural trade. Qualifying for the green box could be especially important in the 2007 legislation, given Brazil's success in having some U.S. payments declared WTO-illegal in the cotton case, not to mention the possibility that in the Doha Round WTO talks the U.S. would agree to give up its trade-distorting programs if other countries would make similar concessions, including greater access to their markets.

"Add to that the increasing role of environmental groups in the ag-policy debate and it's easy to see why some pundits expect the 2007 bill to be the greenest ever, in both senses of the word."

With that background in mind, Mr. Lehner then zeroed in the critical issue: "That's the theory, in any event. In practice, the question is: How would an environmentally focused farm program work? Who would benefit and who would suffer if we switched from commodity programs to conservation programs? What would doubly green mean?"

The article went on to point out that, "Commodity payments are limited to producers of a few 'program crops,' like corn, wheat and cotton -- only a third of American agriculture is covered. A much wider range of producers is eligible for the conservation programs. As a result, there's little overlap between recipients of commodity-program payments and conservation-program payments: Only 6 percent of the nation's farms receive both, according to a recent USDA paper, 'Greening Income Support and Supporting Green,' by economists Roger Claassen and Mitch Morehart."

"Moreover," Mr. Lehner wrote, "within any current 'program crop' the biggest payments tend to go the largest farm operations. That tendency would be much less pronounced in a green farm program, which would be more likely to base payments on environmental considerations than on current or historical farm output. Cotton and rice farms, which receive relatively large payments now, would likely be much-less favored by a green farm-payment approach."

Noting that "Congress is unlikely to enact a thoroughly double-green farm bill," and that, "The legislators are more likely to preserve those commodity programs judged likely to survive WTO challenge," Mr. Lehner went on to say that, "But many of these other WTO-legal programs would also change the mix of winners and losers, according to Robert Thompson, a University of Illinois professor and expert on agricultural policy. 'There are huge disparities among commodities and regions, and it is hard to see how any significant changes in this direction would keep the South or rice, cotton, sugar and dairy producers whole,' Thompson said in an email."

In conclusion, the article indicated that, "However, if Congress keeps the farm-programs pie the same size but colors it green to protect it from WTO challenge, the effect for some large producers could be the same as shrinking the pie. Rather than accept a green farm bill that makes them see red, these producers could put up a political fight that will leave some participants black and blue. In Thompson's words, 'They're not going to roll over and play dead.'"

Hannah Fletcher /farm01.txt , writing last week at The Prairie Star (MT) webpage, reported that, "Because of programs such as the CSP [Conservation Security Program ], supporters say conservation was a star of the 2002 farm bill. They are hoping the 2007 farm bill will again include conservation provisions.

The article also noted that, "As for the CSP, a program that often comes up in farm bill conservation talks, Wilson [Bill Wilson, president of the National Association for Conservation Districts (NACD)] and other leaders hope implementation problems will be addressed in the 2007 bill.

"'Our hope is to maintain the program with the budget constraints and that every area will be available at some point,' Wilson said.

"Congress has decided to extend it for five years in the latest budget reconciliation, he pointed out.

"'Hopefully, it will get the same recognition in the farm bill,' he said.

"Traci Bruckner, policy analyst for the Center for Rural Affairs (CFRA), hopes 2007 will reward those focused on conservation practices and will encourage the next generation to practice environmentally sound methods.

"The CSP will play a key role in that goal if it is implemented appropriately, she said.

"Bruckner said the government needs to look at the whole picture, instead ranking constituents as a way of distributing funds.

"'If farms are judged on the whole picture, we can make this the best program it can be,' she said.

"If implemented correctly, Bruckner said conservation programs have the potential to support mid-size farms and rural communities."

Dennis Pollock
of the Fresno (Calif.) Bee, in an article that was posted yesterday at the Grand Forks Herald (ND) webpage, reported that, "California's $5 billion dairy industry, much of it based in the central San Joaquin Valley, is bracing for what could be lean times as prices for milk products drop and concerns about future federal aid mount.

"The 2007 farm bill is far from being threshed out, but this much appears certain: While the last farm bill in 2002 feasted on budget surpluses, the next one comes at a time of severe deficits.

"'The money isn't there,' says Michael Marsh, chief executive of the
Modesto-based Western United Dairymen.

"Marsh and other industry leaders say there must be a continuing safety net for milk producers who are periodically subjected to cyclical highs and lows in pricing.

"Subsidies are under attack on several fronts - from proposed budget cuts by the Bush administration to criticism from the World Trade Organization."

The article also stated that, "But dairy producers have found an unlikely ally: Environmental groups.

"In the months ahead, it's likely farmers and environmentalists will push to keep the spigot open to pay for clean air and water. The two are allied behind one federal assistance program, used extensively by California dairy farmers, called the Environmental Quality Incentives Program."

The article then included this quote, "'Those are the kind of programs we would like to see subsidies shifted into,' says Bill Walker, West Coast vice president of the Environmental Working Group, a Washington-based organization that has been sharply critical of traditional farm bill handouts.

"'The future of subsides lies in tying them to environmental benefits and not rewarding the biggest producers,' Walker says. 'Do we want to continue to allocate money to price supports that have a host of problems?'"