WASHINGTON – Maryland farmers, whose produce ranges from meat to milk to mushrooms, probably have little to fear from farm bills working their way through Congress, industry officials say.
A bill passed in the Senate Feb. 7 and one to be debated in the House next week would move farmers away from price support and market control programs in place for more than four decades.
Both bills would implement a system of declining fixed payments through 2002, designed to move farmers toward a market economy. But many Maryland farmers are already there.
“Most Maryland farmers run fairly small and diverse operations and Maryland agriculture is already consumer- oriented,” said Maryland Department of Agriculture spokesman Harold Kanarek.
During the last three years, Maryland farmers grew more vegetables and fruits – all unsubsidized – than they had before. They sold more of them directly to consumers instead of produce brokers, Kanarek said.
Most of the corn, wheat and soybeans raised in the state are not tied to price support programs, he said. Much of it is fed to livestock on the farms where it was grown.
The poultry and egg industry, which accounts for about a third of Maryland’s farm income, also is not subject to federal supply or price controls.
Because up to 70 percent of the cost of producing poultry is buying grain, poultry and egg producers stand to benefit from higher grain production and lower prices expected to come from the shift to a market economy, industry experts said.
Likewise, livestock producers and dairy farmers, whose products account for almost a fifth of Maryland farm income, could benefit from reduced feed costs.
For consumers, the transition to a market economy would make prices for grain-based foods, such as cereals and bread, and for grain-dependent foods like meat and milk, less stable.
But, in the long run, a government move away from price- support and production-control programs would bring down Americans’ grocery bills, according to the consumer advocacy group Public Voice for Food and Health Policy and the conservative Competitive Enterprise Institute.
Because the federal subsidy programs have stabilized prices, even farmers who are not in the programs have benefitted from them, said Kevin McNew, assistant professor of agricultural and resource economics at University of Maryland at College Park.
“Where Maryland farmers will get hurt the most is with lower prices that will eventually come after ’95’s [weather-driven] highs,” McNew said. “The most efficient, those who can sustain large swings in prices, will be survivors.”
Nationally, farm groups favor changes that move agriculture to a market economy, but are concerned about how they might be implemented.
“We’re supportive of fiscal responsibility and we’re glad to see something moving, although there are going to be pluses and minuses,” said Maryland Farm Bureau President William Knill.
But bill critics such as the National Grange, whose strongholds are the Northeastern and Western states, and the National Farmers Union, believe the government should provide farmers a “safety net” when weather or market conditions threaten their economic security.
While in many cases experts said agriculture policy proposals before Congress could benefit consumers and farmers simultaneously, they also said provisions in the House bill could put consumers and dairy farmers on opposite sides of the fence.
The proposal would create a federal milk standard in line with higher California standards.
It would require adding nonfat milk solids to fluid milk, increasing both its cost and nutritional value.
The change would raise prices for a gallon of milk by 4 to 7 cents for skim, 14 to 17 cents for low-fat and 3 to 4 cents for whole, according to a Congressional Research Service Report.
Nationwide, dairy farmers support the mandate, claiming it would increase the palatability of milk, and demand for it, along with its food value.
Consumer groups, such as Public Voice, have called the milk proposal overkill. They contend that current standards require enough nutrients in milk and that fortification is not worth the added cost.
Some groups, such as the National Farmers Union, also have criticized a proposal for transition payments, because only farmers who have participated in a price support program in one of the last five years would be eligible for them.
Up to $40,000 in transition payments would be available annually to an eligible farmer, regardless of whether that farmer plants a crop.
NFU spokeswoman Nancy Danielson worried about the policy, which would offer a temporary incentive not to plant without offering assistance after 2002. She said it might encourage some farmers to leave farming without encouraging others to stay in or start farming.
NFU critics have also speculated that a new farm bill could hurt the environment because farmers not in subsidy programs would no longer have to comply with conservation requirements built into the program.
Their concern is disputed by the conservative Competitive Enterprise Institute, which claims that programs have been ineffective in reducing erosion and have increased environmental pressure on acreage in production.
Neither bill tells farmers what to expect from the federal government in 2003. But the bill to be considered in the House would establish an 11-member commission to assess the effect of federal program changes on agriculture and the nation. It would make recommendations about the future relationship between the federal government and agriculture.
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