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Corn+Soybean Digest

Farm Policy: Friend Or Foe?

Money is a touchy subject for most people, but mixed up with government policy and politics, the discussion can be downright volatile.

Although Congress won't begin writing the 2007 Farm Bill until next year, Secretary of Agriculture Mike Johanns is hard at it, conducting listening sessions in several states to begin laying the groundwork for the next law.

Johanns says the Bush administration plans to play a more aggressive role in drafting the 2007 Farm Bill than it did in the 2002 Farm Security and Rural Investment Act.

Iowa State University hosted a Farm Bill policy forum in July to examine the impact of the 2002 Farm Bill, as well as to discuss what should be considered for the 2007 legislation.

The majority of Iowa farmers say the basic direction of the 2002 Farm Bill should be continued. The income protection it offers is adequate and, overall, the program has been successful, according to the 2005 Iowa Farm and Rural Life Poll, a joint venture of the Iowa State University (ISU) College of Agriculture, ISU Extension and the Iowa Department of Agriculture and Land Stewardship.

Sixty-one percent of the farmers responding say the basic directions of the 2002 Farm Bill should be considered in the 2007 Farm Bill, 20% aren't sure and 19% disagree. When asked if the 2002 Farm Bill provided an adequate income protection for farmers, 60% agree, 21% aren't sure and 19% disagree. Fifty-seven percent of respondents say overall the 2002 Farm Bill has been successful, while 27% say they aren't sure and 16% disagree.

According to Paul Lasley, chair of the ISU sociology department and co-investigator of the study, producers also expressed support for developing markets through exports and energy development, as well as for conservation and environmental issues.

In general, the ISU policy forum examined the current state of agriculture, analysis of the 2002 Farm Bill, and trends and issues that should be addressed in the 2007 legislation.

Trends and issues for the future of farming were divided into five topic areas:

  • Feeding the bio-economy
  • The next generation of farmers
  • The health of rural communities
  • Global competition and customers
  • Implementing conservation incentives

Land values, conservation and energy were top of mind during many of the discussions.

Allan Gray, ag economist at Purdue University, expects that budgets will be tight and farmers will simply have to make do with less money from the federal government.

Gray thinks payment limitations will be imposed, with cotton and rice producers most affected by those limitations. Because of World Trade Organization rulings on farm subsidies, he says it's likely that items like the Counter Cyclical Program and LDPs will fall out of vogue, while conservation programs and subsidies for biofuels may be given higher priority.

While the views on what the 2007 Farm Bill should include are about as varied as the people involved in raising food for a living, the opportunities to express your opinions about the legislation will no doubt only increase in the coming year.


The Chicago Mercantile Exchange (CME) has contacted the Chicago Board of Trade (CBOT) about a potential deal between the two futures exchanges. The CBOT says it has received “unsolicited, nonbinding expressions of interest in a business combination,” which it would review. The CME is in good position to launch a bid to acquire the CBOT since it has more than $700 million in cash and marketable securities with no debt. The news sent CME stock soaring to more than $300 per share, according to Richard Brock, the Brock Report.


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