Our nation faces severe economic times. Tens of millions of people are receiving food assistance. Millions of people are out of work. Many people often ask, “Why do farmers need a farm safety net?”
We agree that our farm policy is in need of reform. Farm support programs are in many ways broken, serving neither farmers nor taxpayers well. However, to suggest that we don’t need a farm safety net would be a true folly.
Modern agriculture involves more science and precision than most Americans understand, but we still find it difficult to manage major forces beyond our control that affect our ability to survive. Droughts, floods and global political changes can place us on the brink of bankruptcy in an instant.
While we acknowledge that the overall farm economy has recently been a bright spot in the U.S. economy, we remember too well the examples in our history where economic strength was followed by severe and painful economic hardship. One needs only to look back to the mid-1990s when the Asian financial crisis caused commodity prices to collapse and farm livelihoods to be placed in severe jeopardy.
Failure to adequately assist farmers and ranchers in managing risks they have no other option to protect themselves from will, at best, invite dramatic consolidation of farms and, at worst, make American citizens dependent upon foreign countries for food just as we depend on others for oil. For nearly a hundred years, American public policy has believed that the health of agriculture is important and affects our national security — especially if we want to feed and clothe ourselves.
Today, public policy for agriculture is clearly evolving toward the one guiding principle: Government support should help farmers manage risks that are beyond their control.
A crop insurance system has developed over decades to help producers manage risks that are specific to individual farms. Though this system is always improving, there remain significant gaps and vulnerabilities if we rely on this as the only risk-management tool. Our organizations believe that bridging those gaps is critical to ensuring that producers have appropriate risk-protection options.
Our organizations have been and continue to work hard to make sure that the new government support system is fiscally responsible and publicly accountable. We’re committed to being part of the solution to our nation’s budget problem, but we won’t do so at the expense of the economic stability of our industry that produces basic necessities of a secure life in America.
A modern farm safety net needs to and can be created that complements crop insurance — rather than duplicates it as we have in the past — while also saving the taxpayer significant money. Proposals we offer have put tens of billions of dollars of savings on the table while achieving an appropriate balance of public and private involvement in managing risks on the farm.
The modern farm safety net we envision has several core elements. We strongly believe that producers must show they have suffered a real loss before they receive a payment. The new safety net should be revenue-based and adjust to volatile and dynamic global markets. The new program should help farmers manage long-term market risks unlike crop insurance that protects against risks within a crop year and affect individual farms.