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ARCHIVED  March 1, 1997

Freedom to farm

Revolutionary bill offers flexibility – but with a price
Agriculture is so integrally connected between weather, markets, soil, machinery, seed, research, ideology, insects and disease, pesticides and fertilizers, that legislation, though significant, is a string in the web of an industry that feeds this nation.Pull or change the string, and it affects the whole. In this case, the string is the Freedom to Farm Act, revolutionary agricultural legislation that gives farmers greater decision-making powers to diversify the crops they raise. It also opens them to greater market vulnerability.
The development of the Freedom to Farm Act didn’t occur overnight, and it marks a turn in the tide of events from the original creation of the 1960s Farm Bill. Tom Kourlis, commissioner of agriculture for Colorado, said, “The 1960s Farm Bill created a policy to overproduce food, causing lower food prices. In return, the low food prices kept fewer people from falling below the poverty line. This would eliminate a welfare payout, and the money would be given to subsidize the farmer.”
The subsidization partnership between the government and the farmer included an agreement. The farmer would raise or not raise certain crops as specified by the government in return for subsidy payments. It guaranteed a farmer a certain income and stability, despite the fickleness of weather, markets, machinery or crop disease.
“While people thought the subsidy was a handout for the farmer, the truth is, the legislation just changed who had to pay for food,” Kourlis said. “It’s actually a mathematical economic calculation that takes money from the wealthy and gives it to the poor through the roundabout way of cheap food.”
This picture has changed considerably since the 1960s legislation. In 1994, Congress explored radical change in the Farm Bill, which would be renewed in 1996. Kourlis named two factors as the fundamental drive to change the bill.
“Congress felt a need to balance the national budget. They also were trying to respond to the possible effects of rural crop production,” he said.
Through Congress, the Freedom to Farm Act created a way to wean producers of agricultural commodities such as corn and wheat from government payments over a four-year period. The legislation went into effect last spring.
According to Jim Miller, director of policy and communications at the Colorado Department of Agriculture, “This put a time-diminishing ‘tick-tock’ on farm programs as we know them. We’re probably seeing the end of price-support programs as we know them.”
Granted, this is a drastic change for farmers, moving them out of the subsidy business.
“It’s hard to ask an industry to walk into a new frontier they don’t know,” Kourlis said. Despite the unknown, “The agricultural industry was willing to be flexible and pursue that challenge.”
While price supports and subsidies may be ending for the farmer, so is their freedom to diversify just beginning. As Kourlis said, “The privilege of freedom is accepting risk.”
The subsidy payments to farmers will diminish gradually over the next four years as farmers gain the experience they need to survive in the open marketplace without a safety net.
The change for farmers “Is an adjustment they’ll have to go through, along with a learning curve,´ said Jim Geist, field services director for the Colorado Corn Growers Association.
“This will require different thinking on the part of the farmer, and they will have to implement the tools that exist because now they are truly in a supply and demand situation,” Geist said.
For Geist, those tools are shaving and fine tuning production costs, improving marketing strategies, and accessing new technologies.
“It’s going to be important for farmers to feel comfortable with a profit margin, to know what they want for a profit, and lock in with that price and be happy,” Geist said. This is one of the ways they can protect themselves from volatility, as well as purchasing crop insurance, revenue insurance, buying options or hedging in the commodities market.
Corn and wheat are the greatest commodity crops the Freedom To Farm Act would affect in Colorado. From the corn perspective, Geist said, “We really didn’t see much change in Colorado last year in the crops farmers raised. This state is already more diversified than other regions of the country.”
He has seen an extremely varied attitude toward the legislation that hinged upon what farmers were doing before the bill went into effect. Geist noted, “Colorado is a corn deficit state. We ship a couple million bushels of corn into the state each year to meet the livestock feeding needs.”
Any lost acreage of corn would increase the price. Alan Foutz, a wheat farmer outside of Akron and vice president for the Colorado Farm Bureau, has seen in wheat farming a particular shift away from the traditional wheat-fallow system.
“Wheat will always be king in eastern Colorado; however, now it is easier to diversify,” he said.
Though Foutz has seen a mixed reaction in his farming region to the legislation, it is a move in the direction he took in the early ’90s.
“Economically it was difficult to earn a living on 50 percent of the land through the traditional wheat-fallow system. Now, by farming 75 to 100 percent of the land, I have increased my economic capability.”
He also increased his marketing capacity by increasing the variety of crops he raised. He has moved into a four-year rotation that varies, but includes wheat, no-till sunflowers/corn, minimum or no-till millet, summer fallow or no-till wheat.
The key component to the success of the farmer on the eastern plains, as Foutz sees it, will be continuation of research.
“Having the technology in farming will help us succeed, and the technology comes through research,” he said. He is directly pinpointing the USDA Central Great Plains Research Station, which is located outside of Akron and serves Colorado, western Kansas, western Nebraska, and southern Wyoming. The station has worked with crop rotations and using stored moisture.
As for the overall impact of the Freedom to Farm Act, according to Kourlis, “The jury is still fundamentally out.” There are still questions as to whether farmers can endure a volatile market; whether there will be an adequate food supply; whether food prices will rise.
The concern is what farms this legislation will affect most. According to Miller, “The commercial-sized farm of about $45,000 in gross sales to $250,000 will feel the greatest pinch.”
He said, “It is more difficult for this size farm to expand, access capital and adapt to technology.”
The focus for Geist is not only local and national markets, but also international markets.
“We are living in a worldwide community, and competition encompasses a world market that we need to pay close attention to,” Geist said.
ÿ

Revolutionary bill offers flexibility – but with a price
Agriculture is so integrally connected between weather, markets, soil, machinery, seed, research, ideology, insects and disease, pesticides and fertilizers, that legislation, though significant, is a string in the web of an industry that feeds this nation.Pull or change the string, and it affects the whole. In this case, the string is the Freedom to Farm Act, revolutionary agricultural legislation that gives farmers greater decision-making powers to diversify the crops they raise. It also opens them to greater market vulnerability.
The development of the Freedom to Farm Act didn’t occur…

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