(Feb. 27) ARLINGTON, Va. — Continuing his call for reform of U.S. farm policy, former Congressman Cal Dooley challenged agricultural leaders to recognize the global opportunities that change in the next farm bill could bring.
Dooley spoke at a Feb. 16 dinner that was part of the U.S. Department of Agriculture’s 2006 Agricultural Outlook Forum.
“It is distressing that the most compelling argument for continuing our farm programs is because the Common Agricultural Policy of the European Union is worse,” he said.
Dooley, a fourth generation farmer from central California, served in U.S. House of Representatives for 14 years.
He retired from Congress in 2005 to take the post of president and chief executive officer of the Food Products Association, Washington, D.C. The group is the largest trade association serving the food and beverage industry in the U.S., according to its Web site.
When he was in Congress, Dooley had a record of supporting specialty crop interests and calling for reform of farm programs. He joked that Agriculture Secretary Mike Johanns invited him to speak “in the interests of positioning (Johanns) as the moderate in the farm bill debate.”
In 2003, then Rep. Dooley, a Democrat, and Republican colleague Rep. Doug Ose sponsored the Specialty Crop Competitiveness Act of 2003.
True to the argument for that bill, Dooley’s speech pointed out the disparities in U.S. farm policy.
He cited Henry Wallace, agriculture secretary under President Roosevelt during the Great Depression, who said farm programs were “a temporary solution to deal with an emergency.”
Dooley said “temporary solutions” were still being employed and stated U.S. farm policy doesn’t allow the maximum number of farmers to compete in the global marketplace.
“I would challenge any leader in agriculture — whether in Congress or representing a commodity or agricultural or commodity organization: If they had a clean slate and were asked to design a new agricultural policy for the U.S., would it look like what we have today?” Dooley asked.
What we have today, Dooley said, is a farm policy that:
- gives 92% of crop subsidies to only five commodities;
- gives those subsidies to only 30% of U.S. farmers;
- allows 10% of farmers to receive 70% of subsidies paid by taxpayers;
- designs a policy that results in benefits being capitalized into land values, even though 45% of land is owned by absentee landowners;
- causes farmers to hope for lower prices to receive higher government payments;
- fails to contribute to rural prosperity. Dooley said a recent study by the Federal Reserve Bank of Kansas City found a negative correlation between the amount of farm payments rural communities receive and job and population growth in those communities.
Dooley said organizations that want to extend the farm bill until a successful completion of the Doha Round actually hope for failure at Doha.
“They don’t want a Doha round that forces the reduction of subsidies,” he said.
In fact, Dooley suggested the U.S. should “unilaterally disarm” its farm subsidy programs, irrespective of the outcome of World Trade Organization talks.
He observed New Zealand and Australia ”unilaterally reformed” their farm policies in recent years with positive results for their producers.
Dooley said one reason to act before the conclusion of the WTO talks is to better serve producers who account for 75% of U.S. agricultural output but receive virtually no assistance.
“Allowing a minority of the farmers in the U.S. to refuse to give up our archaic farm policies is holding hostage the 75% of U.S. agriculture that is willing to compete and win in the global marketplace,” he said.
Failure by the U.S. to reform its farm policies has made the European Union less interested in changing its $60 billion a year Common Agricultural Policy and provides cover for Japan’s 500% tariff on rice imports.
Dooley laid a vision for new farm policy that provides a safety net but with a new “toolbox” that helps growers manage risk.
Specifically, he cited whole farm revenue insurance and farm savings accounts as two possible reforms.
Dooley said the transition between farm programs and a new era of farm policy could be eased by allowing commodity farmers to deposit a declining series of subsidy payments into farm saving accounts that would receive preferential tax treatment.
In subsequent years, when farmers have higher incomes, they also would be allowed to make tax-free contributions to those accounts. He admitted such a plan could get caught up in a turf battle between the Agriculture Committee and the Ways and Means Committee.