Session: The 1996 Farm Bill
15
Fund for Rural America has already been sucked up, making up for
cuts in existing rural development programs. But some will be left for
research and for innovative programs such as value-added and market
premium initiatives. That could bring long-run benefits.
[Chuck Hassebrook - cont.]
Farmers would do well to budd a new generation of co-operatives
that enable them to add more value right on the farm by producing
products consumers want and marketing them effectively.
People want government fixed, not out.
John M. Schnittker
senior economist,
Public Voice
The 1996 farm bill did not adequately address consumer concerns.
Food security and food prices were not among the driving forces. In
fact, the bill represented a breaking away from the traditional concerns
of small farms, family farms and consumers.
Regrettably, Congress eliminated authority for the Farmer-Owned
Reserve (FOR), although U.S. and world grain stocks are record-low.
The FOR was the one feature of past farm legislation that had the
potential to address the issues of food security and rising food prices.
Of course, current low grain stocks developed under past farm
programs. Price instability has been the rule in world markets during
the last 12 months, as supply concerns translated into higher prices.
Implications
of the
1996 Farm Bill -
Another Comment
But grain stocks will not rebuild this year to levels that ensure
stable prices. The United States will have to plant and harvest bumper
crops next year to begin the process of rebuilding adequate supplies.
Time and politics both tell us we can and should rebuild stocks.
Consumers already are getting socked. In recent years, the price of
food increased by about 2.5 percent annually. For 1996, however, the
increase is likely to be closer to 4 percent. By 1997, prices could be
rising 4 to 6 percent—almost double the previous average.
There are two widely divergent views for the future:
1. Conventional—"Everything will turn out all right. "
2. Pessimistic—"Irreversible forces have undermined the food
system. Biotechnology has been a disappointment. Rising world popu-
lation could increase demand to impossible levels. Water availability
may be a critical problem within IOyears. Technology yields little
short-term benefit; land availability will be the long-term problem. "
In a world where demand for food is increasing rapidly and
questions are looming about the potential for increased grain produc-
tion in both the short and long runs, strategies are necessary, to guide
the food system in a positive way. The role of public, private and even
nonprofit institutions will remain important.