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More than meets the eye in farm bill debate, K-State's Flinchbaugh says

Barry Flinchbaugh leaves little doubt where his loyalties lie when the wizened “gnome of Manhattan” gives one of his two-hour tours de force on the past, present and future of U.S. farm policy.

The Kansas State University professor notes that he's had roughly 3,500 students during a career that began in Manhattan, in Kansas, in 1971. “That's all the purple pride,” he says. “I don't own a white shirt.”

Flinchbaugh also leaves little doubt that he is clearly in the farmer's corner no matter what his own feelings might be about the farm programs growers have enjoyed over the last 80 years. The latter include some opinions on payment limits that might surprise his peers.

“It's popular today to cuss the farm bill; it's popular today to cuss ag policy,” Flinchbaugh barks. “And, frankly, I wish some of those people would just shut up. For what farm policy and what farm bills have been designed to do they have been successful. And I will defend them … vigorously.

“Would I change them? Certainly. But they have been based historically on price supports, income supports, land retirement and stored reserves. You can quarrel with what they were designed to do, but the facts are they have done what they were designed to do.”

Flinchbaugh, a speaker at the joint annual meetings of the American Society of Farm Managers and Rural Appraisers, National Alliance of Independent Crop Consultants and American Society of Agricultural Consultants in Atlanta, listed three primary accomplishments for farm programs:

  • They have decreased the pain of adjustment to new technology. “They give us time to adjust, and they put a floor under farm income,” he noted.

  • “Contrary to popular opinion, they have benefited the medium-sized farmers the most, and have kept medium-sized farmers in business.”

  • “The benefits of those farm programs have been capitalized into land values and helped build a collateral base under U.S. agriculture.”

Flinchbaugh, who earned his doctorate at Purdue University when former Agriculture Secretary Earl Butz was a professor there, has been alternately praised and blamed as one of the authors of Freedom to Farm, the nickname given the 1996 farm bill.

“By circumstance and luck, I found myself in a very unique position because the chairman of the House ag committee was Pat Roberts, a Republican from Kansas” he said. “The majority leader in the U.S. Senate was Bob Dole from Kansas. And the secretary of agriculture was Dan Glickman, a Democrat from Kansas.

“We got that farm bill passed, and, immediately, we heard freedom to fail, not freedom to farm. Well, the answer to that comment is very straightforward and simple: If you want to have the freedom to farm, you have to have the guts to take the responsibility for freedom to fail.”

Some have said the 2002 farm bill “killed” Freedom to Farm, but Flinchbaugh disagrees. “We added to it,” he said. “We did not decrease the direct payments. We didn't decrease flexibility. We kept all that in there, and then we added this counter-cyclical price program, which Grandfather Flinchbaugh would have described as — backwards.”

The economist, who was chairman of the Commission on 21st Century Agriculture prior to passage of the 1996 law, says the interesting point about the counter-cyclical program is that “it pays farmers when they don't need it and doesn't pay them when they do. It's — backwards.”

Any discussion of the 2007 farm bill has to begin with the federal budget, he says. While higher grain and oilseed prices have led to decreased spending on commodity programs, Flinchbaugh argues Congress shouldn't write the next farm bill based on the near-term outlook.

While the annual figures have been all over the board (from a high of $32.2 billion in 2000 to a low of $4.7 billion in 1996), USDA has averaged spending about $20 billion a year on commodity programs. The estimate for fiscal 2007 is $16.4 billion.

“We will again in history spend $20 billion on farm programs,” he says. “Not in 2007, probably not in 2008, but sometime in the next five years we will spend $20 billion on farm programs again.”

Flinchbaugh describes the hand wringing over the growing federal budget deficit as “pure crap.”

“We've been through all this before. They come home and say, ‘Oh, look at these deficits. They're terrible.’ Then, they'll go back to Washington and find the money. Then they'll say, ‘Well boys, we saved you again,’ and get re-elected.”

The federal budget deficit, though projected at $354 billion for fiscal 2007, “is irrelevant in the farm bill debate,” he said. “Yet it will take up more ink probably than any other issue.”

When compared to President Bush's proposed $2.9 trillion budget for fiscal 2008, Flinchbaugh said with a twinkle in his eye, “I'm not sure, but I understand $20 billion would be an acceptable accounting error.”

What happens if Congress decides to taken the deficit seriously and makes wholesale cuts to farm programs? The Plains states, including Kansas, and some Southern states would be devastated, says Flinchbaugh.

A study by two Kansas State economists shows that 14 states running through the High Plains down through Texas and into Arkansas, Louisiana and Mississippi would see at least a 30 percent decrease in land values if the current programs were eliminated. The biggest drops would occur in North Dakota (44.5 percent) and Oklahoma (45.3 percent).

“Some say, ‘But you're assuming that the farm program payments would be fully capitalized into land values at 100 percent,’” he said. “Fine, let's assume 50 percent. So then you have an 18-percent decrease in Kansas, 22.5 percent in Oklahoma.”

Congress should be able to write a farm program that doesn't get capitalized into land values, he said. “And we ought to target it to medium-sized farmers. We don't like large farmers. They don't do anything for us except feed us.”

Former Agriculture Secretary Dan Glickman once told him economists should be able to write farm programs that wouldn't be capitalized into land values, Flinchbaugh said. “I told him, fine, target these payments to medium-sized farmers, and we'll trade about 100,000 of them on paper the next day.”

Flinchbaugh said he believes the current debate over payment limitations is a “farce.”

For months, anyone who has been paying attention to the farm bill debate has heard that 10 or some other small percentage of farmers receive 80 percent or 90 percent of the farm payments. Such claims make good fodder for editorial writers at the New York Times and the Washington Post, but they aren't true, according to Flinchbaugh.

“We have 2.1 million farms,” he says. “Small farms make up 84 percent of that, small being defined as gross sales of less than 100,000. They produce 21 percent of the food supply, but they receive 30.5 percent of the payments. They make out like pigs. Is that what you've heard before?

“Now look at these big boys that we don't like (with sales of more than $500,000), they make up 3.8 percent of the farmers, produce half the food supply and receive 27 percent of the payments.”

Medium-sized farmers, on the other hand, make up 12.2 percent of the farms, produce 28 percent of the domestically grown food supply and receive 42.7 percent of the payments.

“These programs are designed for the medium-sized farmers,” he said. “They've done what they were supposed to do. So what's the issue? It's a farce.”

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