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American Corn Growers urge Farm Bill conferees to review the facts

Also on CropChoice:

(March 21, 2002 -- CropChoice news) -- The American Corn Growers Association (ACGA) is calling on leadership in the United States Senate and House of Representatives involved in conferencing the next farm bill, to review the facts before making the same fatal mistakes as have been made in previous farm policy decisions.

John Dittrich, Policy Analyst for ACGA, asked the conferees not to fall into the same trap, as have their predecessors, before reviewing a detailed analysis of historic data included in the just updated "Key Indicators of the U.S. Farm Sector-Major Crops." This request comes one day after farm bill conferees announced a tentative agreement on spending priorities for the next farm bill.

"We want to make sure that the conferees understand several key points before making the decisions that will impact so many farm families," said Dittrich. "Our data confirms that previous farm policy decisions to this day are exacerbating the decline in our rural economy. Before the same mistakes are made again, we strongly urge that all conferees, congressional leadership and staff review this historic snapshot compiled from data published by the U.S. Department of Agriculture over the past quarter century."

Dittrich explained:

  • Lower price support rates (CCC loans), which have caused lower farm prices, have not increased exports,
  • Lower support rates have dramatically lowered farm income and bankrupted rural America's income structure
  • Transition from a support program to a direct subsidy program (a.k.a. decoupling) has not protected farm income but has dramatically increased government spending, and
  • Higher support rates have not stimulated overproduction.

The analysis was compiled to give a concise, summarized history of important and interconnected statistics affecting U.S. crop farmers extending back to 1975. This was judged to be the beginning of the modern era of crop farming, agricultural exports, and farm programs.

Some of the more important revelations, which can be observed by studying the analysis, are:

  • Real CCC loan rates and price supports have dropped dramatically through the period,
  • Real farm prices have dropped in a similar manner,
  • Real farm prices to the end user are now approximately 1/3 of what they were in the 1970's,
  • Export volume, though erratic from year to year, has on average remained static throughout the period. During this time, numerous combinations of price support policy, trade policy, currency valuations, and world political situations have existed,
  • Domestic use has risen steadily throughout the period. Virtually all of the growth in total use has been in the domestic market,
  • Our Agricultural Trade Balance has remained static in nominal terms, and has sharply declined in inflation adjusted terms. This suggests that increases in domestic demand have not been due to larger net exports of value added products containing raw commodities,
  • Total use has risen steadily throughout the period, and is now at all time highs,
  • Current ending stocks to total use ratios are very tight to modest by historical standards (with the exception of cotton), yet farm prices are at the lowest nominal levels of the period, and
  • Steadily increasing yields have not offset lower real farm prices. Including very high government payments and higher yields, real gross income per acre is now at record lows, and is approximately 1/3 less than the mid-1980's.

"Based on this important information, ACGA calls upon the conferees to accept, at a minimum, the support rates contained in the Senate passed farm bill," concluded Dittrich.

For a copy of ACGA's report, please go to http://www.acga.org or call Larry Mitchell at (202) 835-0330.