Farm economics with David Minge and C. Ford Runge

Programs | Midday | Topics | Business | Types | Interviews | Call-In | Economy | Grants | Legacy Amendment Digitization (2018-2019) | Agriculture |
Listen: 100601.wav

Second District congressman David Minge and U of M Economist C. Ford Runge discuss proposals to help Minnesota farmers deal with their economic problems.

Read the Text Transcription of the Audio.

(00:00:10) Good morning, and welcome to midday on Minnesota Public Radio. I'm Gary eichten. Glad you could join us. Well, you've heard the story many many times in the last few months farmers in Minnesota are in trouble while the rest of the economy is booming. The farm economy seems to be collapsing what's been missing in all those stories is any real agreement on just what to do about the problem. Well this week Minnesota senator Paul wellstone is traveling around the state trying to develop a consensus on how to deal with the farm problem today. He's visiting Crookston and red lake falls in Northwestern Minnesota. Meanwhile, Minnesota Second District Democratic congressman and possible Senate candidate David. Minge has outlined a 24-point plan to deal with the problems facing Agriculture and day on. Midday. We're going to take a closer look at the some of the ideas being proposed this week. Whew. And it's we'll be talking with Congressman. Minge will be joined by Economist see for druggie and we'll be opening the phone line so you can join our conversation. But first of all before we get started, let's check in with the wellstone farm tour. Here's Minnesota public radio's Dan Gunderson. (00:01:16) I am on fire as United States Senator. This is my work. Now. This is it and I think there's never been a more important time and thanks for coming today about 100 people turned out for a rally on a farm near East Grand Forks. They listened quietly to a message. They already know too. Well, they need better prices for their crops. We got to make sure that there is a Least a price and some income for family farmers in America otherwise conglomerates and corporations are going to form our land and we will regret this as a nation. We got to rewrite that farm bill to get family Farmers a decent price price price price wellstone told Farmers. The worst thing they can do is lose hope and quietly walk away from the family farm. This is a time of economic pain. This is an economic convulsion. But please please please do not give up. We are going to fight and we are going to fight and we are going to speak up and we are going to do everything we can to change Farm policy so that we can have still in America a family farm structure of (00:02:26) Agriculture farmers in the crowd were impressed by the senatorial passion, but Tom could stress key (00:02:30) who drove an hour to hear wellstone (00:02:32) says fiery speeches don't change the (00:02:35) hard reality pretty much given up. Hope ten years ago. Everyone just keeps looking the other way. So why are you still in this is what keeps this is our last year after four (00:02:50) generations. I'm quitting Bruce Driscoll whose Farm wellstone was visiting says he still has energy to fight but he doubts anything will happen until those who live (00:02:59) in cities demand a change in farm (00:03:01) policy feeling it. Some of them don't care as long as there's food on the Shelf. They just don't under maybe it's not not caring. They just don't understand and when farmers do try to get the point across so that's the old farmer whining jokes and that routine and Don Ho Lee whose farm for more than 50 years near East Grand Forks says, he badly wants to believe politicians can turn around the farm crisis, but he's yet to see any (00:03:23) action bad time bad time. We're going to see a lot of farmers through this area. I can be done with my first year. I've lost money to the last eight years. How long can you exist? clunking exist (00:03:43) This is going to be a hell of a year this year over the next week Senator wellstone intends to take his message around the state. He'll wrap up his Minnesota farm tour with a rural Unity rally on Saturday in Laconia. While Stone says he plans to travel to other Midwestern states in an attempt to stir up a Groundswell of support for changes in federal Farm policy Dan Gunderson, Minnesota Public Radio Moorhead. Well as Senator, well Stones tour continues Congressman David Minge is out with a 24-point plan to help deal with the farm crisis. He's joined us this morning by phone and here in the studio a C4 druggie distinguished McKnight University professor of Applied economics and law at the University of Minnesota. We also invite you to join our conversation. Give us a call here as we try to sort through at least some of the problems facing farmers and some of the possible solutions. What is a practical matter government can and should do about any of these problems are number is 6512276 thousand 6512276 thousand outside the Twin Cities. Is one eight hundred two four two 28286512276 thousand or one eight hundred two, four two two eight two eight Congressman manga a professor Runge. Thanks for joining us this morning. Thank you. Good to be with you here Congressman Maggie. Let me start with you toward the end of the story that Dan said in there was a comment from one of the farmers that frankly and nobody will care about this until people in the cities are somehow directly affected. Why is it that people in the city should care about this? Well, we're talking about a country that has the cheapest most abundant the safest food supply in the world and we're skating along here taking this for granted in the cities. I'm not an exception to that. I mean in the sense, I live in the city and I to take that for granted but it's not fair. We as City residents have to recognize that this comes at a time. Tremendous cost to our rural areas and if we're going to maintain a strong Farm economy, we have to be willing to recognize that there is some remedy that's just critical that that has to be found for all of the suffering that's going on. We have a concept of minimum wage. We have safety net programs from one end of the country to another for various parts of the economy, and we've tried to have a safety net program for agriculture. We made some dramatic changes in that in 1995 over my protest I voted against it, but now we're finding that those changes have left much of American agriculture in the Lurch and we have to supplement it with emergency spending programs ad hoc emergency bills, and these are just an inadequate Band-Aid to try to address what agriculture is going through. This is a complex problem. No question about it, but at the risk of oversimplifying And what in your mind is at the root of the problem facing American farmers. Well, I suppose the most basic problem is that we have more farm products than we have demand. And so when you have Supply an excess of demand the price go south on you. There are other features of this. We're very heavily, of course invested in international trade with Agriculture and our part of the country. We have exchange rates which with a strong dollar having the sense discounted u.s. Farm products by maybe 10 15 % It's unclear what the exchange rate is done, but it certainly is it's handicapped us we have problems where on the farming side the production side. We have almost pure competition on the other hand. We have an amazing level of concentration when it comes to the people at farmers are buying from and selling to and that imbalance also has to be factored into the equation. We're trying to achieve certain conservation objectives and often. This is at the expense of the farmer. We expect the farmer to shoulder these conservation costs without much compensation. I think that we have to as we move ahead couple much more clearly some of the conservation practices with as conservation practices with compensation and that sometimes this is these are called Green payments. This is a concept to that I think is important to keep in mind as we move ahead because all of us want to be good stewards of the land the water the air and we expect the farmers here to be a part of providing that stewardship quality and sometimes it's quite expensive Professor wrong. You were the chair of the 1985 Governor's firearm crisis commission. How does the situation out in the farm today compared with what we were what Minnesota Farmers were facing in the 80s? (00:08:40) Well, I think there are elements of similarity but there are some important differences as well. The the primary similarity is that today as then Supply exceeds demand to a considerable degree. And now as then a relatively strong dollar has made it difficult for us to be as competitive as we might be internationally and to some extent now is then the demand side internationally has been weak the Asian economies, of course of the thing that people point to most but then in the mid 80s, there were some similar weaknesses not necessarily in one part of the world but across the world. So there are some similarities that have led to low commodities prices today that were also operating in the mid-80s the primary difference. However is that in the mid-80s farmers were also facing a true Financial Is this arose from some adjustments and Federal Reserve policy that occurred in the early 80s and the level of interest rates that were faced then combined with low commodities prices was leading to a collapse and farmland values and that Financial Farmland value impact is not nearly as serious today as it was then would you agree that the freedom to (00:10:09) farm bill the big change that occurred here three years ago that they did is fundamentally flawed. (00:10:17) Well, I think that there are some very serious problems with it. I want to try to not get too deeply into the details of the legislation here Congressman Minge and I have spoken in the past about these issues and there are a lot of technicalities involved parenthetically. I should say that I'm a supporter of the congressman and have been so anything I say shouldn't be construed as a partisan difference with him. Although I wasn't involved in his recent development of these proposals. And so I think I can give somewhat of an independent assessment my own judgment is that the freedom to farm legislation did some important good things specifically it eliminated the acreage reduction programs that had in effect surrendered market share to our competitors overseas. And it also eliminated the crop by crop subsidy program that it existed previously and provided for a single payment to Farm which was as the phrase goes decoupled from Individual cropping decisions, but what it failed to do and I feel very strongly about this I think is the congressman knows is it failed to develop a safety net which operated in a way that when prices and incomes fell the safety net was there to catch people instead what it did is it offered a set of payments that were fixed over a seven-year contract and had no relationship to the ways in which prices might go up and down and as a result of this lack of what you might more technically call counter-cyclical T the fact that the program didn't operate like a thermostat in adjusting counter to the developments in prices and incomes we find ourselves in a situation in which the payments were actually richest in many ways when Farmers needed them least and now we're falling off when Farmers need the most and this I think is a problem which is readily Isabel but it's the responsibility of the congressman and others in in the Senate and the house to come to terms with the problems of the bill and to fix (00:12:27) it Congressman. I what happened to the money that was paid under the freedom to farm bill to Farmers essentially these transition payments. Don't that money is still being paid out is it not that money is still being paid out and some of the emergency programs have built on that transition payment concept and provided for an extra payment the problem with the transition payments is that they were quickly capitalized in to land values. So if you were renting Land If you're trying to buy land your transition payments were already spent for you because you land costs went up now if you were fortunate enough to own the land that you farmed and didn't have to rent anything. Well, then it worked out as long as you're able to put the money in the bank. And hold it for a bad year, but the trouble was a lot of farmers found themselves with equipment costs. And of course the rent that I talked about and these transition payments have not been of much benefit in trying to provide any kind of counter cyclical safety net or any kind of a program that gives Farmers tools to manage the risks. It just it's failed in that sense. You have a full program here that you've proposing and frankly a lot of it is too too complex for me to understand as a city boy. But if you could if you could pick out one or two items that you would definitely want Congress to address immediately to help farmers of both in the short run and the long term, what would be the highest priorities in your mind Congressman will probably on the immediate side to give the secretary of agriculture the authority to extend the marketing Loan program. We have millions of boy. Tools of corn and soybeans and wheat that are being forced into the market this month September and October and there simply are not buyers out there for this grain. The secretary of agriculture would like to have that Authority. He was that Authority was taken away from him in the 1996 farm bill and that should be done promptly so that we don't have phenomenal amount of green being dumped on the on the market a second thing that I think we ought to move on fairly aggressively is some type of a disaster program to deal with those situations, especially in the North End of the Red River Valley, and now where we've had droughts to provide compensation or assistance to the farmers that have seen the bottom fall out of their operations because of these natural disasters and to the extent that we can make this Federal crop insurance program a strong viable program. I hope we get out of the disaster business then crop insurance or multi-peril Insurance takes over but those would be two things that I think that we ought to undertake almost immediately and if I could add a sort of a footnote of the third try to make sure that we make maximum use of the food aid program so that we we move as much food products, whether it be meat products or grain to other parts of the world where there are there's a problems of hunger and starvation and share these abundant resources. So that those that truly need assistance are receiving it and at the same time we're depleting some of the massive stocks that are hanging over the market talking this our about the some of the problems facing Minnesota Farmers American farmers in general and some of the specific proposals being talked about in terms of trying to address those problems joining us today, Minnesota. Second district Congressman David Minge C4 druggie is with us. He is a professor of Applied economics and law at the University. To Minnesota. If you have a question or comment give us a call here, six five one two, two seven six thousand or 1-800 to for to to 8286512276 thousand or 1-800-222-8477 errs. They perhaps are unaware that the US Department of Agriculture at this point provides loans to Farmers to hold their grain and Market it in an orderly fashion. And these are loans that are for only nine months and the secretary has no authority to extend the term of the loans many farmers entered into these loans last winter and those loans now are maturing and the have to deliver the grain or find some other alternative alternative financing which is not available to them. And that's why we have these massive amounts of grain in our area that are moving to Market because these loans are expiring or coming dupe and we happen to be in the part of the country that makes use of this. We hold the reserves for much of the rest of the United States and that's why this marketing Loan program has created such a almost a crisis situation here in August C4. Druggie. Would you agree that those would be a couple of steps that could be taken immediately that would in fact help (00:17:34) farmers. Well, I think that the what the congressman is responding to is the fact that we do have a kind of a bulge in the supply line of Commodities, which is coming at us as a result of a succession of Fairly good harvests and certainly extending the terms of the marketing loan would allow the government to to to let this bulge of Commodities onto the market in a way that was a little less traumatic than if it all arrived at once and I think that's the point he's making on the other hand. I don't think that that is an adequate response. It's to the problems in farm income and revenues that we've faced and disaster payments, which have been sort of an ad hoc response on the part of the Congress for the last few years really in my judgment don't provide the kind of systemic safety net. That one would want to see. So again, I would say that of the congressman's proposals. The most important is to establish a farm Revenue Assurance program and Link it to Federal crop insurance, which I think ought to be made largely mandatory in order to provide this kind of safety net that we've discussed extending the marketing loan is is a response to the current bulge in the Commodities situation, but doesn't have the kind of systemic effect that I think we are looking for. I'd also add that I'm rather Rather skeptical the idea that we can unload the Surplus oversees the problems that we Face the same problems that are being faced around the world and our experience with using food Aid as a as a way of dumping surpluses from our domestic markets is that it really doesn't have a particularly beneficial effect it what it primarily does is to drive down prices for poor farmers in developing countries and act as a disincentive to their production. So while I'm sympathetic with the fact that we're facing a mountain of surplus Commodities here, I think that what we really need to focus on is the fact that farm incomes and farm revenues here in the United States are depressed and to work primarily on that as our Target rather than imagining that we can somehow find a way to make this Surplus disappear Rick your question, please (00:20:09) Yes, my aunt. Yes, you are. Yes. Listen either. I was reading a book called Cadillac desert. I'm not sure if you're aware of that book at all, but it was talking about how we federally subsidized farming in places like California and Arizona for big corporations with their water bills and other things that are pretty politically touchy down there and I just wonder how come we don't hear much about that because it's actually the our farmers are by their tax with their tax money subsidizing their competition and they're ruining the land in California, you know millions of Acres each year are going out of production salination. And by the time they've finished up there are farmers will be out of business. So just move right in here. I'll take my comment after year. Have we been a selective as we should be in terms of which Farmers we helped in terms of public policy. Well, we've had these irrigation programs for decades. And at this point I'm not aware of any major new irrigation project that is being built by the federal government financed by the federal government. And of course, you don't go in and bust up those irrigation ditches and destroy the value of what's been built over that long period of time so I agree with what the caller is talking about. We do have sort of a Cadillac or you might call an imperial farming policy in the Imperial Valley California and elsewhere, but I think we have to sort of take the landscape as it is today and move ahead and try to make sure that we are good stewards of our Water Resources, but at the same time that we're not trying to Simply destroy farming operations, whether it be California, Arizona those parts of the country that have those massive irrigation projects and and the caller's right that does contribute to additional food supply and even though they may be growing a lot of table crops down there. I'd imagine there's some substitution effect and that The ultimately that land being in production is competitive even with land up here in Minnesota Larry or question. Larry oops, Larry you're on the air. I'm sorry. Larry hello come in Larry. You're on the air. It's not Larry. But okay. I called I have a Some point. I am a little bit emotional about this. I'm not used to be on are all right. I hit three not questioned by three issues that I didn't see been touched at all one. It's it's a basic business marketing issue, which put the quantity versus quality and if it's over, The market is overflowed with the quantity of agricultural products. What about the quality? We cannot find any nature uses that to make a less quantity and better quality people are running for Organics and so on. Okay, that's that's one issue. The second one, it's some years ago. The congressman. I'm calling from North Dakota Byron dorgan brought a loaf of bread to the Congress. I guess give it to almost everybody or so in which was a scale there that one or two slices were the from that bread or the the farmer pay for that bread. And the rest of it was a marketing. So some programs to help farmers not only to produce a grain but Sells a finite product and diversifies that product and the third issue that I haven't heard anybody it's about efficiency because you can form very well with a very high price with all kind of very fancy tractors and GPS and all that that cost hundreds and hundreds of thousands of dollars and produce a green and that grain is producing Canada or another country with the fraction of that price. It's the same quality the same quantity productivity everything but with a fraction of the price and I guess this has to be addressed before any insurance and any government help and so on the government held to be in education and Advising Consulting. All right, I would thanks. Thank you. Thanks Larry. Well, we don't have enough time to go into depth on any of these questions before we have to take our break but a quick comment Congressman. Well, I just like comment on organic. I think that the caller makes a good point and I would certainly include that in a proposal that I would that I'm advancing and that is that these Niche markets organic food does certainly meet a demand that's out there in the public and we should help farmers make a transition to that type of farming operation if they'd like to do so usually takes about three years to make that transition C4 groggy quick comment on Larry's points. (00:25:19) Well, I think that you might summarize by saying that that wherever farmers can extract more value from what they produce either by by finding Niche markets or specialized high quality demand. That's to the good notwithstanding that we Face a serious crisis at the moment simply because of the quantity of bulk Commodities on the market in relation to current demand. And so while value-added efforts will be of some help at the margin. They're really not But at the center of the solution (00:25:54) for talking this our about some of the problems facing Minnesota and American farmers for that matter c-44 druggie is with us distinguish McKnight University professor of Applied economics and law to U of M and Minnesota Congressman David Minge is with us. He is out with a 24-point proposal to try to help Minnesota Farmers. We'd like to to join our conversation got a question or comment six five one two, two seven six thousand 6512276 thousand outside the Twin Cities one eight hundred two, four two two eight two eight will get to some more callers in a couple minutes (00:26:27) on the next all things considered the upside of jealousy a stadium delegation from st. Paul Scopes out Coors Field in Denver is the first of three visits supporters. Hope will inspire enough envy that Minnesota will build something similar for the Twins and Governor Ventura does barnstorming tour for his unicameral legislature idea. I'm Lorna Benson join me for all things considered weekdays at 3:00 on Minnesota Public Radio. (00:26:52) Hey, you know wfm 91.1 in the Twin Cities, by the way, we invite you to join us over the noon hour today new Minnesota Public Radio American radio works documentary on the Forgotten 14 million kids who are living in poverty in This Land of Plenty new documentary coming up over the noon hour right now news headlines. Who's Eric Janssen Eric. Thank you. Gary. Good morning. President Clinton is offering whatever help turkey needs in the wake of today's devastating earthquake after a briefing from AIDS the president today called the destruction in Turkey awful. He says turkey has long been a friend of America and a key NATO Ally. He says the US must stand with them Turkish officials estimate at least a thousand are dead and at least 5,000 more injured in the earthquake which measured seven point eight on the Richter Scale it hit it early in the morning. When most people were still asleep many Panic people ran into the streets others were crushed and collapsing buildings the photographers who chased Princess Diana the night of her fatal car crash May soon be cleared in her death State prosecutors in Paris are In charges be dismissed they say they found no evidence to prove the 9 photographers in a press motorcyclists were directly responsible for the crash. The recommendation has been sent to the judge but he's under no obligation to follow their advice. Diana's companion Dodi Fayed and their driver roll were also killed in the 1997 crash in Minnesota news. Governor Ventura is making a one-house legislature at top priority of his agenda for the 2000 session. He's touring the state today to promote his plan under his unicameral plan. Ventura wants no more than a hundred and thirty-five lawmakers and he wants the single house to be nonpartisan. There are now two hundred and one state senators and representatives. Minnesota's unemployment rate Rose to 2.9 percent in July, that's up from 2.6 percent in June State officials attribute the jump to more people looking for work, even though they were actually more people working and despite the increase. The state rate was still well below the national jobless rate of 4.3% for July Minnesota weather today scattered afternoon showers in the far North mostly cloudy in the Northeast, but everywhere else mostly sunny. Some current conditions for you Duluth cloudy skies and 64 degrees Fargo mostly sunny and 68 Sioux Falls, mostly sunny and 78 degrees and in the Twin Cities right now Sunny and 75 degrees. I'm Eric Janssen back to Gary eichten with midday. Thank you Eric 25 minutes before noon. This is midday in Minnesota Public Radio today taking a look at some of the problems facing Minnesota Farmers our guests Minnesota. Second district Congressman David McGee and C4 druggie who is a professor of Applied economics and law at the University of Minnesota programming an NPR is supported by Ecolab dedicated to improving cleaning and sanitation standards for leading Hospitality Healthcare and food processing customers worldwide on the web at gentlemen, before we get back to our callers a question for both of you and that is it seems like again at the risk of oversimplifying here. It seems like the basic problem is that American farmers are growing too much. There's too much product out there. Isn't there any way to control that? Well, they certainly are ways that we have tried to control that we've had so-called set aside Acres with previous farm programs secretary of agriculture would have authority to idle up to I think it was five percent some cases. It won't even even went up to 10% of the Acres particular crops. We have the conservation Reserve program, which at its Inception was viewed in part as a supply Management program in addition to promoting sound conservation practices today. It's been changed. So it's really a it's a conservation program but we have had these efforts to take land out of production in that fashion. The other thing I would say is that we can work on the demand side just as an example ethanol production is now taking as much as 10 percent of the crop of corn in the United States if we were using more ethanol or if we found other uses for crops, like corn and soybeans that has a dramatic impact and can help stabilize. This is because these industrial uses tend to be much more stable uses and we minimize some of the volatility that otherwise just plagues agriculture or groggy anyway to better manage how many? Acres of corn are grown so that it more closely matches the actual demand. Well, I'd (00:31:19) make two points here. I think first as the congressman says the historical record has been full of attempts to try to to control the supply and volume of production by by government Fiat of one sort or another although the example C Used are somewhat indirect of the conservation Reserve program. Unfortunately was partially a supply control program. I think it should have been targeted directly at the environment and only at the environment in the first instance, but the historical record of trying to control production in the United States has generally shown that these efforts have been a failure but there's a more fundamental Point here, which is that it is nonsensical to pour billions of dollars into research and development and into assistance to Farmers to allow them to improve their efficiency. In productivity per acre and then turn around and tell them not to produce what you are doing. There is an effect stepping on the gas and the brake at the same time and what that does inevitably as it causes the brakes to slip and that's been the experience historically on the demand side. I am fully in agreement that anything and everything we can do to encourage increases in incomes around the world which will lead to increases in the demand for the Commodities that we are so efficient at producing we should do. I however am not of the view that the way to increase demand is to is to engage in excessive subsidization of specific Industries in this country such as the ethanol industry. I think it's far better to think about a broad scale effort to increase the demand for these Commodities across the board John your question. (00:33:05) I have several comments and questions which all tied together give the whole tone of where I'm going and hope to hear from your So you can keep it relatively short. Do you believe in supply and demand in the marketplace is farming a business is it government's responsibility to subsidize Private Business. Our farm problems today are just the result of past meddling on the part of government subsidy. Why should we continue to distort the marketplace has natural commodity prices will control supply and demand no human government agency can react to Market forces quickly enough to avoid problems of this magnitude. Okay, Congressman Minge. Well, I think that the real effort that we have with federal policy ought to be to sort of dampen or soften the harsh impacts of the supply-demand principles and and part of what we ought to be doing is giving Farmers tools that they can use to manage risks one of the proposals that I have and Ford mentioned that is a crop insurance. We can go to What's called a whole Farm Revenue Assurance program where farmers can purchase insurance to try to provide a hedge against dramatic drop in farming come the marketing Loan program is also a way to try to manage risk when we're looking at Global Production. We have weather patterns. We have economic patterns and so on that haunt agriculture in a way that almost no other sector of economic life is haunted and I think that the time has come as we negotiate trade agreements that we should be saying to the other countries if we see a traumatic and precipitous drop that's coming in prices of farm Commodities. Let's not just throw our agricultural sector to the dogs here and watch it struggle. But let's try to make sure that we don't have this glut of grain that moves an International International Marketplace and just a claps prices. Yes to a certain extent federal policy has softened these things in the past, but I don't think that we can say that the problems that we're experiencing today are result of policies in the past. I think that that's both an over simplification of what's been done in the past and it's quite an unfair care summary of those of those efforts are drunk. He does the government have any legitimate role to play in this. (00:35:40) Well, first of all eyes no sigh. I applaud the caller for what I think are some very hard-edged and precise questions that need to be asked my own view is that is that farming is a business sometimes a small and sometimes a large one. It's largely dictated by market forces against which the government is relatively powerless to intervene on the other hand. I do think that a safety net in agriculture that provides a basic and minimal Of support for farm incomes as distinct from Farm prices and that's a very important distinction that we might want to explore is well within the tradition the American tradition of providing a safety net for those people who find themselves at temporary disadvantage. There's a big difference. However between that kind of a temporary Safety Net in the idea that there ought to be a permanent and continuing subsidy to a subset of our citizens. I don't believe that that is part of our tradition and I don't think it should be let me add to that by saying that one of the things that I felt very strongly about over the years and analyzing agricultural policy is that the public doesn't fully appreciate just how skewed the the the benefits from Farm payments and subsidies are in relation to the number of farmers roughly speaking at the moment even under the 1996 legislation, which in some respects is worse than the past and in this way. About about 90% of all the payments are flowing to 10 or 15% of the producers and the producers that are getting most the payments are those that have the largest land areas and many respects. Some people are getting payments that aren't producers at all. They're just landowners. So what we really have is a structure of subsidies that are designed to pay people who owned farmland and although Congressman Minge is made the argument that the reason he wants to develop a new proposal as on the basis of social justice as if the farm sector is being left behind and that therefore this requires some sort of compensation along the lines of what people call horizontal Equity. I think we need to look very closely at the fact that within the farm sector the way in which these programs and payments have played out has been very very regressive. The largest producers have gotten most of the payments and many small producers have gotten little or nothing. So I think that that's a serious problem that merits attention fire. (00:38:14) Well, I agree and we ought to have payment limitations. I've advocated payment limitations and I had a very frustrating experience in the house at committee about two weeks ago where with respect to Federal crop insurance. I proposed a benefit limitation for essentially a free catastrophic crop insurance policy a limitation at $300,000. And then using the savings from that to help beginning Farmers obtain a more favorable level of crop insurance and my colleagues voted me down. We are not dealing with something where the views that I have or Ford has or others in the Upper Midwest half are being in easily and quickly embraced in Washington DC. It's a situation where we have to fight just to get our perspective heard and in order to be successful. Whether it be payment limitation concepts are other things we need to have the full and unified support of the farm community and one of the things that's happening here in 1999 is that we see that the farm community is gradually coalescing behind a fairly aggressive set of proposals. And I think that this is the first time in a number of years that we have seen Farm organizations that represent quite a spectrum of views and politics get together and start to talk the same language. We need to have that happen. If anything is going to be successful in my opinion Congressman. This is a delicate question and I'm probably won't phrase it properly and will offend some people in the process, but it came up earlier in the in the story The Dan Gunderson filed on the the well Storm farm tour, there was a farmer noting that all he expected people would hear about this again and all they think about our Farmers whining. How big of a problem is that over the years it seems like Good Times bad times. We've always heard about how bad it is on the farm. Did farmers Cry Wolf once too often to the point where nobody's listening anymore. Well, I think that agriculture is an enormous sector of our economy. And at any time that some farmers are doing well, there will be many others that are doing poorly and that colors the situation and it also makes it possible to let's say have a program like we're having right now that is quite sympathetic to the plight of farmers and then perhaps tomorrow there will be something else where in the news media about some Farm program or some land owner that has benefited handsomely and perhaps unjustifiably and so then people could become quite cynical. So I mean we have these kinds of disconnects and I think that that's unfortunate. But what I think is most important here is that those of us that are trying to speak on behalf of Farmers in our country have the unified support of the farming community and that we have proposals which are balanced which are intended to provide a certain level of safety net or I've called them tools to manage risk and not something that is designed to as Ford as mentioned simply benefit large landowners. That's not the objective. I agree with him. The objective is to enable young Farmers to get into farming even people who are inheriting a farm now don't think they can get into farming but to enable them to get in and to enable them to continue to produce the food that we depend upon in this country and still provide for their families for druggie. We often hear the middleman pointed to as a boogeyman here as the farmers and making any money the consumers don't see prices go down when commodity prices go down there for somebody is making a killing in the middle. Is that a legitimate criticism are are the are the middlemen ripping off the farmers and the (00:42:18) consumers? Well, there's a long tradition in agriculture of blaming the middleman. It's not unlike the tradition in finance of blaming the lender for your problems. I think that that we can do something about this problem where it exists by making sure that that the prices that are charged and received our as transparent as possible that are that they are made public and publicized and I think this is important especially in the livestock industry where it's often allege that that go-betweens are are are engaged in this kind of practice, but I have to say that on balance. I think that these kinds of charges really just reflect the frustration that people have with low prices and prices are high. You don't hear very much about the middleman. It's only when prices are low. I would like to come back if I could to just kind of summarize Some of the elements that the congressman and I have been talking about in terms of what a safety net proposal would involve we both agreed that it should be counter-cyclical in the sense that it should kick in when prices and incomes are low and should pull back when they're higher the congressman mentioned. And of course I've advocated for a long time that we should also Target programs in such a way that the biggest landowners don't cream off the bulk of the benefits. The only way that that kind of thing can be accomplished as by a strict targeting and limits on the amount of payments that any single producer can receive the payments ought to be sufficient to see a farmer through a rough stretch, but not rich enough to be worth farming the government for and that's what we've seen in the past. And then thirdly he just alluded to the fact that the congressman just alluded to the fact that situations are different in different. Parts of the country. This is a big country and the idea that one size should fit all in terms of the subsidy. Mechanism. I think is mistaken. We ought to be able to tailor and Target these subsidies regionally so that they're paid at different levels and different parts of the country depending on whether drought or flood or other issues are facing Farmers there. So counter cyclicity targeting payments to Farmers that need the most through payment limitations and some sort of regionality strike me as the three elements of a safety net that we really need to build into future policy (00:44:44) Congressman. Not a lot of time left, but does that sound like the kind of program that could actually get through Congress? It is still a big fight and I'll just tell you one of my frustrations was that three weeks ago when I was working on just a very Modest Proposal. I discovered that a couple of congressmen from neighboring states whose farmers are in my office often were unwilling to join in that proposal. And when I mentioned to someone out here that that was the case they were flabbergasted the politics of this is not easy and the farmers that were meeting with I think with Senator wellstone and express some cynicism about you know, what's going to happen. I understand that cynicism. It's easy for us to talk on the radio and about all of the wonderful ideas that we have and what we're going to do and we get back to Washington and I mean, I'm spending a lot of time talking about that but on the other hand, I think that we have to also be cautious about where what we're promising people because it is very very difficult to translate these good ideas into good policies and We just have to keep on working as hard as we can to do the best job that we can meanwhile the Senate has passed seven point four billion dollar emergency aid package is the house likely to follow suit when it when you go back to work. I expect that this will come up in conference committee and that the house will agree with the Senate the problem with the Senate package. Is that a good portion of the money is just an extra transition payment and as both Ford and I have know that this tends to primarily benefit land ownership and often land ownership. That's not even as far removed from the farm. So I'm quite frustrated with even the Senate package and I know that Senator wellstone and others have been frustrated with it as well. Well, we're out of time, but I really appreciate it. I know we haven't solved the issue or solve the problem by any means, but at least hopefully provided some information folks. Thanks so much for joining us Congressman. Appreciate it. Thank you, Gary C4. Druggie. Thank you very much for coming in today. Thank you our guest this our Minnesota second. Congressman David Minge and C4 druggie distinguished McKnight University professor of Applied economics and law at the University of Minnesota course our coverage of this issue will continue here on Minnesota Public Radio special broadcast from the state fair on August 30th. You might Mark when a market down will be culminating a series of broadcast citizens Forum broadcasts on the agricultural crisis. That's coming up August 30th out at the State Fair tired of reading our governor can beat up your governor on the bumper of the car in front of you on the freeway entrance ramp, help us come up with a new Minnesota bumper sticker. Send us your brilliant ideas for a state bumper sticker will make the best 3 into real bumper stickers and unveil them at the state fair to enter go to our website at (00:47:36) or (00:47:38) mail them to empty our bumper sticker 45 e 7th St. Paul 5/5 (00:47:43) 101 (00:47:47) It's about 6 minutes now before noon. Midday coming to you on Minnesota Public Radio.


Digitization made possible by the State of Minnesota Legacy Amendment’s Arts and Cultural Heritage Fund, approved by voters in 2008.

This Story Appears in the Following Collections

Views and opinions expressed in the content do not represent the opinions of APMG. APMG is not responsible for objectionable content and language represented on the site. Please use the "Contact Us" button if you'd like to report a piece of content. Thank you.

Transcriptions provided are machine generated, and while APMG makes the best effort for accuracy, mistakes will happen. Please excuse these errors and use the "Contact Us" button if you'd like to report an error. Thank you.

< path d="M23.5-64c0 0.1 0 0.1 0 0.2 -0.1 0.1-0.1 0.1-0.2 0.1 -0.1 0.1-0.1 0.3-0.1 0.4 -0.2 0.1 0 0.2 0 0.3 0 0 0 0.1 0 0.2 0 0.1 0 0.3 0.1 0.4 0.1 0.2 0.3 0.4 0.4 0.5 0.2 0.1 0.4 0.6 0.6 0.6 0.2 0 0.4-0.1 0.5-0.1 0.2 0 0.4 0 0.6-0.1 0.2-0.1 0.1-0.3 0.3-0.5 0.1-0.1 0.3 0 0.4-0.1 0.2-0.1 0.3-0.3 0.4-0.5 0-0.1 0-0.1 0-0.2 0-0.1 0.1-0.2 0.1-0.3 0-0.1-0.1-0.1-0.1-0.2 0-0.1 0-0.2 0-0.3 0-0.2 0-0.4-0.1-0.5 -0.4-0.7-1.2-0.9-2-0.8 -0.2 0-0.3 0.1-0.4 0.2 -0.2 0.1-0.1 0.2-0.3 0.2 -0.1 0-0.2 0.1-0.2 0.2C23.5-64 23.5-64.1 23.5-64 23.5-64 23.5-64 23.5-64"/>