1996 National Public Policy Education Conference
The 1996 Farm Bill:
Implications for Farmers, Families,
Consumers & Rural Communities
Daryll Ray
founder and director,
Agricultural Policy
Analysis Center;
University of Tennessee
Institute of Agriculture
The 1996 farm bill can be viewed as the convergence of disparate
interests, involved in the legislative process:
■ Farmers, who were wanting fewer restrictions.
■ Agribusiness, wanting more acreage and production.
■ The reform movement, wanting government out of agriculture.
■ Legislators, primarily concerned about the budget, the budget
and the budget.
What
Does It
All Mean?
The Republican majority that swept into Congress in 1994 sought
ways to reduce the role of government in agriculture and other policy
arenas. Its major focus became how to cut $13.4 billion from the $56.6
billion the Congressional Budget Office estimated it would cost to
continue the 1990 farm bill for another seven years. After more than a
year of proposals, the result was the Federal Agricultural Improvement
and Reform (FAIR) Act.
The farm bill passed without open congressional debate. But that
does not mean all is rosy in these early days of a new farm policy era.
Reformers see the bill as transitional payments, to wean farmers
from farm programs. After all, the FAIR actually increases (and front
loads) government payments.
Some farmers believe the bill probably is the best they can expect.
Even more farmers think the bill is a windfall—a tremendous amount
of money they had not expected to receive. Moreover, the FAIR does
not end permanent farm program authority; so, policy can be revisited.
Agricultural Policy Analysis Center (APAC) projections for 1997
to 2004 suggest com acreage under the FAIR may average 1.3 percent
or 1 million acres below what would have been likely under an
extended 1990 farm bill. Soybean acreage may average 2.5 percent or
1.5 million acres higher. Wheat acreage could be slightly higher and
cotton, slightly lower.
Prices for the major grains could drop through 1999. They may
recover beyond that time, but probably not to 1996 levels.
APAC projections suggest that over the next few years, net returns
for the seven major crops under the FAIR could be higher than they
would have been if the 1990 farm bill had been extended. Projected