the 2007 farm bill in context [summer 2006 update]

T h e 2 0 0 7 F a r m B i l l i n C o n t e x t 1 Wh a t i s a F a r m B i l l ? The Farm Bill is periodic legislation that replaces the Agricultural Adjustment Act (AAA), permanent legislation from the 1930s which set in place the original farm policy . The AAA, which is still technically in force, reects a 1930s market and world that are incompatible with the current conditions. The pe rmanent legislation has been amended twice, most recently in 1949, but much of it remains an anachronism. The regularly aut ho- rized Farm Bills cover numerous areas that are not included in permanent legislation and would not be addressed should the permanent legislation be al- lowed to expire. At its heart, the Farm Bill is concerned with farm income support and, indirectly, support for America’s rural communities. From the very beginning this was accomplished through produc- tion management (mostly through land idling in exchange for payments) and price supports (in the form of marketing loans and deciency payments), a policy that remained relatively unchanged for nearly 60 years. Farm support is extended to pro- ducers of specic storable commodities which are known as program crops. * Other commodities that generally receive no support include meats, hay, poultry , nuts, veget ables, and nu rsery products. The periodic reauthorization of the Farm Bill allows U.S. farm programs and policy to be ad- justed to reec t curre nt needs and conditions. Thus, what was initially legislation focused on farm pro- duction—marketing loans, subsidies and produc- tion controls—and soil conservation expanded over time to include rural development, nutrition programs, research, trade and, very recently, energy. Farm Bills developed slowly for decades with modest changes until the nature of the po- litical and global economies confronted the new realities of the 1980s. Among the forc es pushing for changes to farm policy were increased bilateral trade, a growing desire for shrinking the size and purview of the federal government, and a long period of high interest rates and low commodity prices. While t hese pressures took time to build up, they were compounded by the increasing integra- tion in both the global economy and farm sector. Importantly, the Global Agreement on Tariffs and Trade (or GATT, which later became the World Trade Organization, or WTO) began to shift its fo- cus from strictly tariff activities to trade promotion and reduc ing marke t barriers. Furthermore, there were calls from within Congress to end government agriculture subsidies or at the least to reform how Alabama • A rkansas • Flori da • Georgia • Louisiana • K entucky • Maryland • Mississippi • Missouri North Carolina • Oklahoma • South Carolina • Tennessee • Texas • Virginia • West Virginia S o u t h e r n L e g i s l a t i v e C o n f e r e n c e [ e 2007 Farm Bill in Context] SLC Regional Resource southern legislative conference • p.o. box 98129 • atlanta, georgia 30359 • ph: 404/633-1866 • fx: 404/633-4896 • www.slcatlanta.org * Program crops are corn, sorghum, barley oats, cotton, rice, soybeans, sunower seed, canola, rapeseed, safower, axseed , mustard seed, dry peas, lentils, small chickpeas, and peanuts along with milk, beet and cane sugar, wool, mohair, and honey. Jonathan Watts Hu ll Senior Policy Analyst Southern Legislative Conference June 2006 S U Southern Legislative Conference The Council of Sta te Governments Sharing capitol ideas

the 2007 farm bill in context [summer 2006 update]

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