EDITOR'S NOTE — Few issues have created as much furor as President Bush's proposals to restrict farm program payments to $250,000 per individual and limit loan eligibility to 85 percent of a farmer's direct payment yield. Farm Press Editors Elton Robinson, Ron Smith, Harry Cline and Cecil Yancy talked to growers to get their reaction to the president's proposals.
“It's not good news for farmers.” “We'll be able to dodge the bullet.” “It's premature to get excited about the proposed cuts to agriculture in the president's budget.”
Those are just a few of the comments coming from growers in the upper Southeast.
Cotton grower representatives are “thoroughly convinced that we'll be able to convince people in Washington, D.C.,” that the proposed cuts to farm programs in the president's budget are “disproportionate,” says Roy Baxley of Dillon County, S.C.
Readying for planting, Baxley expects to see some cuts, but not the magnitude of the Bush proposal, which includes payment limitations.
“Given the prices we have, if these cuts were implemented, I'd lose 35 to 40 percent of my assistance,” Baxley says. “That would mean I would grow less cotton and more wheat and soybeans.”
Baxley as well as others aren't ready to do that just yet. He's getting ready to plant 1,300 to 1,400 acres of cotton this season. He's also gearing up to plant peanuts this year.
“We're going to do everything in our power to fight it and prove to Congress that these programs are absolutely necessary,” Baxley says.
Cotton producer Allan Baucom of Union County, N.C., believes the budget proposal is “a first blush” of the process. “It's premature to get excited. We have made no changes in our plans for this year based on the president's budget.
“If they want to cut a budget, it must be equitable,” Baucom says. “Let's cut every department the same amount, every aspect of every department the same amount.”
Rex Alphin, a Windsor, Va., diversified producer, says, “It's not good news for farmers.
“For farmers who rely completely on row crops, it's just more screws tightening,” Alphin says.
He believes payments limitations could be beneficial only in the sense that they don't affect the family farm. “When it starts affecting the family farm, which is the backbone of agriculture, it would be tough,” Alphin says.
“It's slowly becoming where we don't have a cash crop,” Alphin says. “Peanuts have been our cash crop in the past, but the contract price has gone down,” Alphin says. “But we'll continue to grow peanuts”
Alphin, who grows crops on about 1,000 acres, also has a hog operation. “It's getting very difficult for farmers to make a living. It's going to be tough.”
Taking the tact that farm programs provide the underpinning for 15 percent of the economy, grower representatives of the National Cotton Council are emphasizing the benefits of farm programs from a consumer perspective.
Baxley provides an example that comes from a “thank you” visit following the signing of the 2002 farm bill. “One of the congressmen from my state pulled me out in the hall and said he was somewhat sorry that he had voted for the farm bill. Some of his conservative constituents were telling him it was an extreme waste of money.
“I said, ‘Let's look at it this way: Both of us are consumers and taxpayers, right? What is it worth to you to be protected by the strongest military in the world?’ He said it was worth a lot.
“Well, ‘what is it worth to you to have access to the most abundant and safest supply of food and clothing in the world? Is it worth $100?’ He said, ‘yes.’
“According to the Congressional Budget Office, consumers are getting that for $67 a year,” Baxley says. “That's what it's costing the American taxpayer.”
Traveling to Washington, D.C., with the Southern Cotton Growers, Baxley has found “we have a lot of people on our side that believe the farm bill is working.”
Proposed changes in the farm bill might be designed to create more small farmers, but for Dyersburg, Tenn., cotton producer Jimmy Moody and Senath, Mo. cotton producer Charles Parker, “broke farmers” is the more apt description.
“I'm involved in two operations, my family operation and a partnership,” Moody says. “My grandfather formed Moody Properties, Inc., in 1966 as an estate planning tool — a way to divide his property equally among his children. We've been farming as a corporation for almost 40 years. There are a lot of relatives in the corporation who rely on the income to live.
“Current USDA regulations make Moody Properties a single entity for payment purposes. The marketing loan today (March 2) is 13.43 cents. With a $75,000 hard cap, a 1,000 pound yield will limit my cotton acres out at 558 acres, and there's nothing left for any other crops.”
Moody knows what that will do to his operation and others. “To figure out cotton acreage every year, you'll have to project the marketing gain, then do the math to figure out how many acres of cotton you can afford to plant.
“Then, you're going to have to go to a crop that is not susceptible to that limit. Basically, the limit is going to dictate how I farm. It's going to eliminate the medium- and large cotton operations in this country.
“If the cap were to stand, it's just about going to prohibit us from growing cotton when prices are low at planting time. It's going to force us into other crops.”
The trickle-down effect on the rural economy is another consideration, according to Moody. “What do you do if you're a ginner knowing you're ginning this much one year and maybe 30 percent of that the next year? And you've got all these fixed costs to worry about. It will really wreak havoc with the cotton industry in this country.
“Warehouses, fertilizer and chemical vendors, ag pilots are all going to be hurt, too,” says Moody. “We have a lot of widows who have farmland rented out for cotton at a high dollar. But with the new limits, the cotton farmer who leases that land will limit out and won't farm it.
Senath, Mo., cotton producer Charles Parker says proposed changes would cut farmers off at their financial knees. “We signed a contract back in 2002 to last through 2007. We've been under budget the whole period of time and now they want to cut us.
“We can take a percentage cut on a direct pay and maybe the counter-cyclical. I'm not saying I want to, but one thing that has kept us in business is (marketing loan) certificates. When you talk about certificates applying against the limitation and then you cut your limitation, then change the 3-entity rule, it will be a disaster.”
Without an effective safety net, cotton producers can only hope for record-breaking crops every year. “I don't believe there's any way in the world we can make the same kind of crop in 2005 that we made in 2004. I hope we do. We can survive if we can make this kind of crop.”
Parker is holding out hope that good sense will prevail. “In past farm bills, they've kind of pitted the northern farmer against the southern farmer, but the way they have this one set up, it's going to affect the northern corn farmer as much as it does the southern cotton farmer. That's one reason why I think we might survive.
“I'm cautiously optimistic that something can be worked out. We realize that we can't keep spending money while the deficit keeps getting worse. But agriculture is between 1 percent and 1.5 percent of the total budget. And there are a lot of things in the ag budget that are not agriculture.”
If everything goes through as proposed, “I don't know what path I'd take,” Parker said. “But I'm sure our northern farmers don't want us growing a lot of corn and beans down here. We have some good irrigated cotton and rice land that will grow some corn and beans. This country needs the South's crops and it needs the North's crops.”