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Good news on U.S. agriculture horizon dampened by federal budget proposal

Nothing quite dampens the spirit like the federal government threatening to break its word on agreements that were reached as part of the 2008 farm bill.

And I — one of the world’s foremost cynics — was actually starting to feel fairly optimistic about the state of U.S. agriculture heading into the 2010 planting season. There have been several valid reasons for optimism in recent months.

For one thing, in my part of the Southeast anyway, the rainfall that began last harvest has been unrelenting. Now, if it’ll stop long enough to get this crop planted, the subsurface soil moisture should be adequately charged to get this crop off to fast start. So we’re good on the weather, for now.

Other things — more intangible — have given me cause for optimism this winter. The production meetings, both regional and local, have appeared to be very well attended this year. And maybe it’s just that I’m getting older, but there seem to be more young people at these meetings than in other years. I’ve read reports that say more sons and daughters are staying on the farm because of the dismal employment prospects off the farm. Whatever the reason, it’s good to see more youth getting involved in farming.

And, it’s a very good thing that 2009 is over, to paraphrase a University of Georgia economist. During a recent agricultural forecast meeting held in the state, it was noted that last year, most commodity prices dropped by 10 percent, leaving Georgia farmers facing their most significant decline in farm gate value in a decade.

In 2009, commodity and livestock prices were lower than they were in 2008. Net farm income dropped by 38 percent compared to 2008, according the U.S. Department of Agriculture. Farm land values also took a tumble. Decreases in commercial and residential development, demand for recreational land and farm commodity prices discouraged aggressive farm real estate investments, causing Georgia’s farm real estate values to fall by 7 percent over 2008 levels.

However, economists agree that Georgia’s net farm income should improve in 2010.

“It is important to recognize that 2009 was an unusual year in the past decade,” says economist John McKissick, director of the UGA Center for Agribusiness and Economic Development. “Georgia agriculture and agribusiness have continued to grow and prosper through most of the last 10 years despite droughts and volatile prices. And 2010, while presenting some new challenges, is at least likely to return the industry to a growth path.”

But, he cautions, a recovery to 2008 levels is doubtful within the next year or two.

Even with last year’s slump, crops still fared much better than livestock in 2009 and should see continued improvement in 2010, say the economists.

University of Georgia Dean of Agriculture Scott Angle was even so bold as to predict that his state could become the nation’s leader in agriculture. “Agriculture is growing in Georgia,” says Angle. “As California faces growing water problems and Florida has increasing land use issues, many are looking to Georgia to be the breadbasket of the nation. So, we fully expect the agriculture industry here to continue to grow.”

But then, on the heels of this spate of good news, comes word that the President’s Fiscal Year 2011 budget contains proposals that would, among other things, eliminate storage payments for peanuts and cotton and impose payment limitation reductions. Both the peanut and cotton storage payments and the compromise language for payment limitations were part of the 2008 farm bill agreement. So, in other words, the U.S. Government is proposing that it break a contract that has already been made with you, the farmer.

In the report language, the administration proposes to eliminate payments to cotton and peanut producers that compensate them for their cost of storing their commodities that are put under loan with the USDA. The administration also proposes to limit farm subsidies to farmers by reducing the cap on direct payments by 25 percent, and reducing each of the adjusted gross income (AGI) commodity payment eligibility limits for farm and non-farm income by $250,000 over three years.

It’s certainly understandable — considering our nation’s current fiscal situation — why budget tightening is in order. But to renege on a contract and to attempt to make an already established policy null and void is unacceptable.

Let’s hope that our largely ineffective Congress can at least figure a way to right this wrong.


TAGS: Legislative
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