State and federal farm policy developments dramatic

State and federal farm policy
developments dramatic

Federal Farm Bill a bad deal, but reauthorization of Indiana's Farm Counseling Project will help family farmers survive.

In the past few months there have been significant changes in farm policy in Indiana and in Washington. The bad news is from Washington, where Congress passed a new farm bill that is not in the best interests of farmers who operate small and medium size farms. The good news is from Indianapolis, where the General Assembly restored and expanded the statutory authorization for the Farm Counseling Program.

The Farm Bill

The 1996 version of the Farm Bill, H.R. 2854, tagged by the corporate interests that lobbied for its passage as the Freedom to Farm Act, and signed into law by President Clinton on April 4, starts the nation down a new economic path for family farmers. This is a path that will throw family farmers into an international market where the prices for the goods they produce will be largely driven by multinational commodities conglomerates.

But this path is not so new: it strongly resembles the unlimited production agricultural economy that existed following World War I in the United States. That economy brought on depression-like conditions for America's farmers by the mid 1920s, years before the general economic crash of 1929.

So what are the major provisions of the 1996 Farm Bill?

According to the National Family Farm Coalition, of which CAC is a member, "there are some small yet significant improvements in this farm bill for some conservation programs, the creation of a Community Food Security Demonstration Program within USDA, a Fund for Rural America to . . . dedicate up to $100 million . . . annually to unmet rural needs."

However, these gains are more than offset by the high-risk agriculture the new law puts into motion for small and medium size farms. First, the freedom to farm approach will push American farmers into a world-market setting with little or no economic protection as support payments disappear over the next seven years and target loan rates decline on the commodities produced by farmers.

This will certainly lead to lower prices over time for farmers in this country and around the world. History tells us that production contracts with multinational corporations such as ConAgra, Cargil, or Tyson are a poor basis for insuring the economic survival of family farms.

Second, the phase out of the support payments will still allow giant corporate farms to collect those dollars over the next seven years. In fact, the payments will no longer be linked to production.

Third, the borrower rights provisions that progressive farm organizations have fought for and won since the mid-1980s have been weakened by this bill. CAC urges persons concerned about the farm credit provisions of the bill to contact the Farmers Legal Action Group in St. Paul, Minnesota at (612) 223-5400, or the Farm Counseling Project in Indiana at 1-800-288-6581.

It appears that the new Farm Bill will be a bad deal, over time, for true family farmers. As Larry Swartz, farmer and President of the National Family Farm Coalition, has been quoted as saying, "The Freedom to Farm approach . . . will primarily promote the kind of corporate welfare that the Republicans claim they want to eliminate. It will force smaller farm operations to bear the brunt of the cuts, while maintaining existing loopholes for the largest farms and agri-business's."

Reauthorization of the Farm Counseling Project

The good news for family farmers is the Indiana General Assembly's passage of SB 416 to reauthorize in state statute the Farm Counseling Program.

In 1988, after three years of battling the Indiana Banking Association and the Indiana Farm Bureau, CAC succeeded in passing the Farm Counseling and Debt Mediation Act. That victory was possible because of the hard work of several Republican and Democrat legislators, and support from then Attorney General Linley Pearson, several church denominations, the Indiana Farmers Union, the National Farmers Organization, and many individual farmers who were involved in the legislative process through CAC's Indiana Rural Organizing Project.

For the past several years the Farm Counseling Project has assisted thousands of farm families in Indiana. The project helped family farmers develop rational communications with their lenders and to avoid, in many cases, needless litigation while restructuring their debts. The project succeeded in stopping many needless foreclosures and in keeping family farmers in business.

Over time the program made many converts in the banking community as public and private lenders learned that working with farmers was better than getting into expensive legal battles with them. Furthermore, the Farm Counseling Project, operated by Legal Services corporations in northern and southern Indiana, was often able to help farmers and lenders find common ground and new approaches to solve very difficult problems.

Unfortunately, on April 29, 1995, State Sen. Morris Mills, an Indianapolis Republican, authored a repeal of the Farm Counseling Project law in an amendment to the state budget act 20 minutes before the end of the 1995 General Assembly. The Mills amendment was secretly placed in the budget amendment and legislators did not know that they had repealed the program until several weeks following the conclusion of the legislative session.

The shameful Mills amendment offended legislators in both political parties, and it worried farm families that had kept their farms because of the Farm Counseling Project and those farmers who were in active negotiations with their lenders with FCP assistance.

In the summer of 1995, CAC worked closely with Lt. Governor Frank O'Bannon to devise a plan for continuing the Farm Counseling Project under the Lt. Governor's general statutory authority as the state's Commissioner of Agriculture. CAC also worked with the Lt. Governor's staff and the FCP to reorganize the project under the authority of the Northern Indiana Legal Services Program in order to make it more efficient and to provide more effective services to family farmers.

Significantly, as the summer turned into fall, and the 1996 General Assembly got closer, CAC and others urged family farmers to speak to legislators about the importance of the FCP. Legislators and the Lt. Governor's office urged the project's director, Roselyn Amor, to put together the elements of what should be in a reauthorized Farm Counseling Project statute, and to present to the House Ways and Means Committee a report on FCP activities.

State Rep. Bill Friend (R - Macy) amended the new FCP statutory language into SB 416, and with full bipartisan support from the House the revised bill passed on third reading by a vote of 91 to 0. On March 6, the Senate passed the bill 31 to 16 over the objections of Sen. Mills.

Significantly, the restoration of the Farm Counseling law was made possible in large measure because it had the active support of the Indiana Farm Bureau. John Cardwell, CAC's Legislative Director states, "CAC has to give credit for the FCP's statutory restoration to Roselyn Amor and the quality work of her staff, Lt. Governor O'Bannon and his staff, to Farm Bureau for proactively seeking the bill's passage, and to the legislators of both parties that carried and spoke for the bill. The family farmers who spoke up about the Farm Counseling Project's value to their lives are the people who deserve the most thanks. It is their courage that won this battle, and that is why protecting the family farm is so important."

(c) Copyright 1996, Citizens Action Coalition of Indiana, Inc. All rights reserved. Use or duplication of this material in its entirety is hereby granted as long as accompanied by this copyright and appropriate credit is given.

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