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Farm Bill should not alter row-crop picture
By Eva Ann Dorris
MISSISSIPPI STATE -- Mississippi's estimated planted acreage for 2002 reveals some significant swings between cotton and soybean acreage, but those changes appear more the result of weather, commodity prices and available financing than the new Farm Bill.
Planting of the state's row crops was a little slow getting started this spring as farmers anticipated the writing and passage of a massive new farm law, the Farm Security and Rural Investment Act of 2002. By May 13, when President Bush signed the act, Mississippi growers had long since stopped waiting. No one could afford to miss a crop, even if it was for the government.
The U.S. Department of Agriculture's June 29 Planting Intentions Survey projects Mississippi's cotton acreage at 1.18 million acres, down 420,000 acres from last year's harvest. Soybean production is forecast at 1.47 million acres, up 350,000 acres from last year. Corn acreage expectations are for 540,000 acres, up 155,000 acres from the 2002 harvest. Rice acreage went from 253,000 harvested in 2001 to 265,000 acres planted in 2002.
"The general consensus is the May 13 passage of the 2002 Farm Bill was much too late for farmers to react and revise their planting intentions and crop mix for the 2002 crop year," said Bill Herndon, an agricultural economist with the Mississippi Agricultural and Forestry Experiment Station and head of Mississippi State University's agricultural economics department.
"Over the remaining years of the farm bill, it appears that market prices will have more
impact than the new farm legislation on planted acreage of the major crops in Mississippi," Herndon said. "Some farmers may want to switch from cotton or rice to corn or soybeans to reduce their financial risks and costs of production."
Herndon said producers may hesitate to make any substantial changes that could place at risk their established program payment base acres and yields, which are used to determine commodity payments.
"Given the very nature and design of the 2002 Farm Bill, farmers are now less vulnerable to low market prices, but relative commodity prices and expected revenues will continue to influence or alter their crop mixes and crop acreage," he said.
Steve Martin, agricultural economist with the Delta Research and Extension Center in Stoneville, agreed that this year's plantings were made without much regard to the Farm Bill.
"Weather, prices, timing and insurance or lack thereof were the major factors in planting decisions," Martin said. "The primary factors were weather and, to a lesser extent, prices. As far as future trends, the Farm Bill should be neutral, but there will be some considerations as to the ability to update bases and yields in the next bill because of the precedence established in the 2002 bill."
Martin said producers may try to maintain bases in high-value crops like cotton and rice unless prices of other crops give them an immediate advantage.
Herndon said even though the legislation came late, it was still good news to the state's farmers and for the state's overall economy.
"The positive implications are the program payments of the 2002 Farm Bill will provide economic stability to farmers, the farm sector and their communities while protecting the vast amounts of investments farmers have in the land, equipment and other capital goods," Herndon said. "The 2002 Farm Bill is designed to provide an income safety net for farmers and provide additional income support during years with low commodity prices."
The Food and Agricultural Policy Research Institute at the University of Missouri estimates the 2002 Farm Bill will provide $157.3 million of additional farm revenues in Mississippi for the eight major crops. Herndon said using a modern economic multiplier, the direct plus secondary and spin-off effects of this $157.3 million are projected to be $318.6 million.
"Many economists believe this projection is much too low, but it's the best available," Herndon said. "Given the favorable status of cotton and rice in the 2002 Farm Bill program payments plan, Mississippi stands to receive a relatively larger share of program payments than other states."
During one of several Farm Bill meetings sponsored by MSU and Farm Bureau and held throughout the state during June, Mississippi Farm Bureau President David Waide said critics of the new legislation are concerned because they don't understand why such a program is needed.
"Producers aren't the ones getting the subsidy payments, and they won't be as long as people have to eat," Waide said. "Consumers get the subsidies, and that is why we have the most affordable and safest food supply in the world."
Daryl Burney, a cotton, corn and cattle farmer from Yalobusha County, attended one of the Farm Bill sessions. He was there to gain information on the new legislation and learn how it will affect his future planting decisions, marketing and even production.
Burney said he was pleased to see more money and commitment for conservation efforts included in the program. Money for conservation programs increased four-fold under the new legislation. The incentives may inspire more farmers to consider altering their methods in favor of practices such as runoff control and conservation tillage production.
Burney said he was concerned with the negative publicity the Farm Bill has gotten from those outside the agricultural industry.
"People don't understand that these payment aren't blank checks," he said. "There are many stipulations attached and everything we do ties into the stability of the market."
After hearing several economists explain the Farm Bill and the basic guidelines and procedures, Burney said he didn't see the new legislation as a "solve-all" farm bill.
"I don't know if it's the best we could have gotten, but it's better than what we had last time in terms of stabilizing the farm economy," he said.
For more information on the 2002 Farm Bill, check out MSU's Farm Bill Web page at http://www.agecon.msstate.edu/FarmPolicy/index.php.