As discussions about the next farm bill begin to get earnest, it’s widely accepted that subsidies will be dramatically reduced, especially direct payments to farmers. Meanwhile, most everyone still believes that there must be a safety net, and that food production remains a national security issue.
Agriculture is an easy target for budget cuts, as we’re enjoying good times. We also don’t carry a lot of electoral punch at the ballot box. Plus, most of us probably acknowledge that some cuts are probably prudent.
American agricultural competitiveness remains a bright spot in the nation’s economy, as exports continue to expand. With agriculture doing far better than most parts of the economy, even farmers are resigned to, if not totally comfortable with, the fact that spending will be reduced.
Of course, those of us in agriculture tend to forget that the majority of the budget for agriculture has nothing to do with the production side. In fact, the largest portion of USDA’s budget consists of food subsidies to citizens, not farm subsidies.
Still, it’s understood that spending must be reduced. Of course, the livestock industry would just as soon not even be included in the farm bill as, historically, the farm bill has not only led to higher input costs but added unnecessary oversight and regulation costs. In fact, the number-one request by livestock producers isn’t for government assistance but rather for government to get off of our backs. Too much regulation, too much oversight, and too much government intervention are the overwhelming concerns expressed by the livestock industry. Secondly, it is the subsidization of other products that puts livestock producers at an unfair disadvantage.
Given the number of conservatives elected in the last cycle who identify themselves with the Tea Party movement, as well as the need to get our nation’s financial house in order, the only question would seem to be the magnitude of the cuts needed, rather than whether they will occur. Given our government’s recent lack of resolve to lower costs, I would venture to guess that the cuts will be manageable and probably insignificant from an overall fiscal view.
I would also add that recent history tells us that the government sees every decrease in dollars spent as a decrease in political power. Thus, it will try to replace every dollar cut with an increase in regulations to maintain or expand its power.
The statement “just leave us alone” may seem like a sound strategy, but it will eventually morph to adjust to political reality, which is to “limit the damage so we can go forward in feeding the world in a sustainable manner as efficiently as possible.” And when Washington becomes involved, it means we’ll have to very diligent as an industry to limit the damage.