The new Farm Bill currently being debated by Congress is being closely watched by Mississippi agriculture interests because the outcome will have a major impact not just on the farming community, but the state’s overall economy.
Production agriculture is a very important part of Mississippi economy.
“And the Farm Bill has a lot of relevance for production agriculture,” said
Dr. John Anderson, an Extension Service economist with Mississippi State University.
“There is a lot of interest in it. If you look at the past few years, government payments in Mississippi have run anywhere from $400 million to $600 million. Particularly if you get into rural Mississippi, agriculture is a vital part of the economy and the business community. A lot of people will be watching this very closely as it evolves. There was a lot of hope it would have been resolved by now. But as the year winds down, anyone with stake in agriculture or the ag economy is going to be watching to see how it goes.”
It is important to note that the Farm Bill is more than just commodity program payments. Another aspect of the Farm Bill is conservation programs such as the Conservation Reserve Program and the Wetlands Reserve Program.
“The Conservation Reserve Program is of primary importance in Mississippi,” Anderson said. “Mississippi has had tremendous participation with the Conservation Reserve Program and Wetlands Reserve Program. Both of those programs have done a lot to preserve environmentally sensitive land, land that was at risk from erosion or other sorts of environmental degradation.”
The Farm Bill also provides funds for rural development and for food and nutrition programs. Those are obviously important well beyond the farm sector.
Mississippi farmers rely on the Farm Bill programs to deal with uncertainties in the marketplace. Right now, commodity prices are fairly high. Anderson said with higher prices, there is a little less sense of urgency than in 2002 when farmers were faced with a very challenging market environment.
“Still, the Farm Bill is important because of the tremendous uncertainty about what is going to happen,” Anderson said. “The Farm Bill is part of what farmers count on to help deal with that uncertainty.”
The U.S. House has passed a new Farm Bill to replace the 2002 Farm Bill that expires this year. The Senate is still debating the Farm Bill. Once the Senate finishes its deliberations, a conference committee will be named to iron out differences between the two versions of the bill.
Most agriculture interests have been fairly satisfied with the 2002 Farm Bill, which has turned out to be not as expensive as some people feared. Because markets have been good, programs have cost less than expected. Anderson said the hope is that the new Farm Bill will be close to the House version of the bill that made fairly small changes to basic programs.
“The Senate version is still very much up in the air, so it is hard to say at this point what it might look like,” Anderson. “There is some anxiety about how much of it is going to be changed because what they have now is widely seen as being pretty good and effective.”
Mississippi Farm Bureau president David Waide supports continuing the programs contained in the 2002 Farm Bill.
“Obviously, we would have liked to have continued the 2002 Farm Bill in Mississippi with same the rules and limits,” Waide said. “We think that did work for Mississippi agriculture and provided the consumer with a safe, affordable domestic supply of food. Any major changes could cause heartburn. I would estimate that between 25% and 30% of our overall economy in Mississippi is based on agriculture. So, that makes the Farm Bill critical.”
Currently, the high costs of oil are a major drag on agriculture. Waide pointed out that when the average person pulls up to the gas pump, it costs $50 to $60 to fill up. The farmer pulls up to his fuel tank, and puts $300 worth of fuel into his tractor. Fertilizer costs have gone up proportionally because oil is used to manufacture nitrogen fertilizer, and potash and phosphate have gone up because most of it is imported. With the weak dollar, the cost of fertilizer has increased.
The weak dollar does help farmers with exporting products overseas. But Waide said often because of free trade agreements, there aren’t tariffs on products coming into the country, but when exporting to other countries, tariffs can range from 18% to 45%.
“To compound that, ag has changed now that there are a lot of technology fees that have to be paid, and those prices have escalated over the time the technology has come on board,” Waide said. “That is the reason we advocate for a safety net for farmers because all of those costs are real. Commodity prices go up and down, but input costs rarely go down. They continue to go up.”
Waide said the Farm Bill is for the protection of the American consumer because it creates a domestic supply of food at an affordable price. He adds that support to agriculture is a very small percentage of the total budget of the U.S.
“It is so insignificant in the total picture that we can’t afford not to offer agriculture the kind of support it needs to maintain what it does so well,” he said. “As a result of what agriculture does, it is my belief that it is one of the greatest resources we have to remain a free and sovereign nation because we aren’t obligated to anyone for our food supply. If we can continue to produce domestically, we will never be obligated to anyone. That is why it is important that agriculture continues to have protection to assure that domestic food supply.”
Contact MBJ contributing writer Becky Gillette at email@example.com.