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A Newsletter
Surveying National Events
Affecting Rural America.		 Center for Rural Affairs
PO Box 136     Lyons NE 68038
(402) 687-2100
 www.cfra.org    info@cfra.org 		       September 2004
IN THIS ISSUE:

Feature Article:
Health Care in Rural America: Part II

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Center for Rural Affairs
PO Box 136
Lyons NE 68038

Greyhound Bus Service
Update on transportation service to rural stops

Since our article last month on the loss of Greyhound Bus Lines service to many rural communities in the Midwest, Great Plains, and West, we are pleased to note the announcement of local and regional bus lines stepping in to pick up services on some of the lines Greyhound abandoned.

Bus lines that will continue service include Jefferson Bus Lines in Minnesota, Iowa, and South Dakota; Rimrock Trailways in North Dakota; and Burlington Trailways and Arrow Stage Lines in Nebraska, Iowa, and Colorado.

Many of these services are provided as a result of federal and state grants and subsidies – we hope these funding streams continue so transportation services now available are continued.

Many readers have also asked what they can do about the sudden lack of transportation services in their community. We suggest contacting Stephen E. Gorman, President and CEO of Greyhound Lines, Inc. at PO Box 660362, Dallas, Texas 75266-0362.


USDA Wants Reviewers
Several programs at USDA seek qualified proposal reviewers. This is an excellent opportunity to learn more about USDA programs and how decisions to fund projects are made. Be part of forwarding sustainable, organic, value added, small business, family farm/ranch and/or rural community development projects by serving as a reviewer.

In general, reviewers are required to have an agriculture-related degree and two years experience in a field related to agriculture. Five years of experience in an agriculture business or related field is often considered in place of a degree. Reviewers are generally paid a small honorarium and reimbursed for required travel. Access to technology is necessary as most reviews are done electronically.

For more information, contact Kim Leval, Senior Policy Analyst at her Oregon office, 541.687.1490 or kimleval@qwest.net  

Center Annual Report
You can read the Center for Rural Affairs’ latest Annual Report on our website. Or if you prefer, a printed copy is available at no charge. Just call 402.687.2100 or email us to request a copy.

Center Annual Gathering
The Center for Rural Affairs' Annual Gathering will be held February 26, 2005. Reserve the date and stay tuned for more details as planning for this fun, inspirational day continues.

Rural Community Listening Sessions Begin
Center staff will tour Nebraska to hear directly from rural people about their concerns

Ready to speak your piece? The Center for Rural Affairs hosts a series of statewide listening sessions in Nebraska beginning September 13. The sessions will focus on rural, community, and economic development in Nebraska. Special emphasis will be placed on state legislation for rural development.

“The listening sessions are designed to encourage rural Nebraskans to let their voices be heard,” says Chuck Hayes, Director of Constituency Building, Organizing, and Special Initiatives for the Center. “These meetings assist us in defining the most pressing policy/legislative issues affecting our communities.”

The success of this effort, says Hayes, will be determined by a broad-based turnout of concerned citizens. The Center encourages the participation of everyone living in rural areas – business owners, farmers, ranchers, educators, clergy, laborers, town officials, school board members, youth, seniors, and all other concerned citizens, whether they are familiar with the Center or not.

We hope to attract new faces and voices by conducting these sessions. All Nebraska-based Center supporters can assist by inviting friends and family to attend. “We’ll promote the sessions through local radio and newspapers. But you can greatly aid our efforts by spreading the word in your community,” says Russ Gifford, Director of Communications for the Center.

Chuck and Russ have extensive experience in facilitating community listening sessions – so the result should be an exciting evening of give and take, and the discussions should be enlightening! We’ll analyze the results of the listening sessions and share them with all participants and Center staff. This is an opportunity for our supporters to let us know if we are pursuing the issues that matter to our rural communities.

We cannot fight every battle, but we want to make sure we are fighting the ones that matter most to rural Nebraskans. After all, only by citizens coming together to speak with a strong and unified voice can we turn our hopes into reality.

Contact: Chuck Hayes, chuckch@cfra.org or Russ Gifford, russg@cfra.org for more information.

Proposed Sale of Farm Credit Services Raises Concerns

The proposed purchase of Farm Credit Services of America by Dutch banking conglomerate Rabobank raises critical issues that cry for the attention of Congress, as well as the farmer stockholders and federal regulators being asked to approve the sale.

Omaha-based Farm Credit Services is a producer-owned cooperative that lends to farmers and ranchers in Iowa, Nebraska, South Dakota, and Wyoming. The banks were initially created with federal money (since repaid) and to this day enjoy competitive advantages over local rural banks. System banks are tax exempt, and the feds back the bonds issued to raise money to loan to farmers.

But Farm Credit Services has not always used those advantages in the interest of all of agriculture. It has positioned itself as a leading financier of industrial agriculture. It has financed some of the biggest corporate hog operations and has a reputation for cherry picking the biggest and most lucrative farm borrowers.

Furthermore, the extraordinarily strong $1.3 billon of capital reserves held by Farm Credit Services suggests that it was using its preferred status to build capital rather than to keep interest rates low or pay patronage dividends. In theory, that capital provides a means to buy off the federal Farm Credit Administration, which regulates System banks and must approve the sale.

Under the proposed sale, $500 million of that capital plus a $100 million premium from Rabobank would be paid to the stockholders (borrowers), averaging over $10,000 per borrower. The remaining $800 million of reserves would be paid back to the federal Farm Credit Administration’s insurance corporation and used to lower interest rates or increase patronage dividends to borrowers of other system banks.

What is the motive for the sale? Farm Credit Services CEO Jack Webster says the bank wants to be free of the legal limits that prevent it from expanding beyond its four-state region and providing home mortgage loans in larger towns and cities.

Now that the bank has used federal backing to establish a dominant position in the region, Webster wants to transfer that dominance to a commercial bank free to do whatever it wants to turn a profit. (We wonder whether Mr. Webster might gain a position with Rabobank, should the sale go through.)
Before passing on the sale, farmer stockholders should ask some fundamental questions. First, why relinquish their share of a bank with $1.3 billion of capital for just $600 million – less than 50 cents on the dollar?

Keeping the system intact would enable them to use its strong capital reserves, together with the continued backing of the feds, to lower interest rates or pay patronage dividends. It would also preserve borrowers’ rights to appeal foreclosure and the right of first refusal to rent or buyback any land they lose through foreclosure. Those rights would be lost under the sale.

Congress should be safeguarding the public interest. Would turning the dominant position of Farm Credit Services over to an international banking conglomerate damage competition? Would Rabobank use its size and power to subsidize loans in the short term to drive out competitors – particularly smaller community banks?

Surely Congress did not create and subsidize a farmer-owned lending institution only to hand a dominant market position to an international banking conglomerate. Finally, Congress should examine the aggressive focus of Farm Credit Services on industrial agriculture and explore new avenues for ensuring adequate credit availability to the rest of agriculture.

One place to start would be the $800 million that would be transferred back to Farm Credit Insurance Corporation if the buyout goes through. Instead of using that to subsidize Farm Credit System borrowers in the rest of the country – corporate farms and all – Congress should instead redirect that money to a beginning farmer fund. That fund could support initiatives to open opportunity to a new generation of farmers.

Even if the sale does not go through, Congress could direct the system to create such a fund by levying a small surcharge on future Farm Credit System bonds. That would transfer a portion of the subsidy that federal backing now grants industrial agriculture back to family farming.

Finally, Congress should enhance competition in agricultural lending by enabling locally-owned community banks to also raise money for farm loans through government-backed Farm Credit System bonds – not just Systems banks. That would enable local banks to be more competitive. It would prevent government backing from being used by Farm Credit System banks to build a dominant position in farm lending only to be turned over to an international conglomerate.

COUNTER OFFER FOR FARM CREDIT SERVICES
As the above article was going to press, Minnesota-based Ag Star Financial Services announced a competing and larger offer – $650 million – to buy Farm Credit Services. Ag Star would keep the remaining $800 million of capital within the System and use it to pay patronage dividends to members.

 Ag Star is also a farmer-owned Farm Credit System Bank currently serving Minnesota and Wisconsin. CEO Webster downplayed the offer in an Omaha World Herald article for coming from a smaller association with the same regulatory constraints, significantly different he said from “the opportunity to be part of a global [financial] provider” with a strong track record and the flexibility to offer a full array of services.

That statement causes us to ask, is the objective to serve the interests of farmer members, or to advance the growth aspirations of management?

FARMERS FOR FARM CREDIT WEBSITE
A group of stockholders of Farm Credit Services of America has formed to oppose the acquisition of Farm Credit Services of America by Dutch banking conglomerate Rabobank. They are urging farmers and others interested in rural issues to join them. Find out more at http://www.farmersforfarmcredit.com 

Contact: Chuck Hassebrook, chuckh@cfra.org for more information.

Strategic Planning Helps Find Ways to Build Strong Communities
Good strategic planning begins with three key questions, and the answers lead to eight crucial, continuous planning steps

An often-heard phrase in most town council or village board meetings is, “What is our/your strategic plan?” Most officials have very little idea what a strategic plan consists of, let alone having one.

Strategic planning, if done right, asks three questions of communities:

  • Where is our community today?
  • What do we want our community to be like in the future?
  • How can we effectively move toward the future?

Simple and easy, right? The truth is that this type of goal setting and planning is a continuous process that is never done. Development decisions must be based on the resources available to the community and its needs.

Crucial steps to good strategic planning include:

  1. Organizing
  2. Scanning the Environment
  3. Identifying the Key Issues
  4. Developing Goals and Recommending Strategies
  5. Formulating Action Plans
  6. Implementing Action Plans
  7. Monitoring the Results
  8. Scanning the Environment

Notice the pattern: the strategic planning process has a continual loop by always being aware of the environment. Promoting rural economic development is hard work and requires understanding community resources and the opportunities available for using those resources.

Trends in state and national economics are also likely to affect those decisions. By scanning the environment, communities can identify the strengths, weaknesses, opportunities, and threats that are always present.

Local governments in rural areas are often caught between demands for more government services while experiencing continuous reductions in state and federal funding. This makes the planning process even more necessary and more difficult. Strategic planning helps communities look for alternative ways to create a strong community and provide a solid economic base.

Strategic planning cannot cure what ails most communities today, but it can help them to focus on problems and address them. Making a plan and keeping it orderly allows people in rural counties and towns to take control of their situation and future.

Contact: Michael L. Holton, michaellh@cfra.org for more information on community revitalization.

Granite Falls, Minnesota Hosts Lively Town Hall Meeting

On June 28, Congressman Collin Peterson (D, MN, 7th district) and 60 town hall participants that included farmers, main street business owners, and local elected officials shared concerns and ideas in a rousing discussion on how to revitalize rural areas.

Full funding for the Conservation Security Program, farm program payment limits, mandatory country of origin labeling (COOL), better beginning farmer loans, funding for value added and new market development, and renewable energy assistance were among topics raised by area citizens.

Congressman Peterson, a senior member of the House agricultural committee, responded to each concern raised and shared that he helped push for a mandatory COOL Bill. The town hall meeting was cosponsored by the Center and the Land Stewardship Project.

If you are located in western Minnesota and would like to host or help with a town hall meeting in your area, contact Kim Leval at her Oregon office, 541.687.1490 or kimleval@qwest.net 

Pacific and Inland Northwest Farm Bill Training, Outreach

Help with farm bill programs and access to funding is now available in the Northwest. With funding from the Bullitt Foundation, Kim Leval, Senior Policy Analyst based in Eugene, Oregon is available to provide outreach and to help with ideas or questions related to federal farm policy and funding.

The Center and other area partners are especially interested in working with farmers and ranchers, agricultural commodity groups and commissions unique to the Northwest (i.e. berry and horticultural commissions), boards and staff of environmental groups, state and federal agency staff including Resource Conservation and Development Districts (RC and D’s), extension staff working with direct market clientele, and others.

Groups and individuals in Idaho, Oregon, western Montana, or Washington can contact Kim to sign up for tailored outreach presentations, activities, and/or materials to meet their needs. Reach Kim Leval at 541.687.1490 or kimleval@qwest.net 

Corporate Farming Notes
Agribusiness in charge at USDA?
A report titled, USDA INC., released at the Organization for Competitive Markets (OCM) annual conference examines the extent to which USDA has been hijacked by corporate agribusiness. The report finds the agency inundated with high-level appointees with ties to corporate agribusiness, while essentially no one represents family farmers or other public interest groups.

The report identified five case studies in which policies adopted directly reflect the special interest ties of the people establishing those policies. They were Bovine Spongiform Encephalopathy (BSE), Captive Supply, Meat Inspection, Biotech Foods, and Concentrated Animal Feeding Operations (CAFOs).

The report offers recommendations to address its findings. You can view it at http://www.competitivemarkets.com 

Contact: Traci Bruckner, tracib@cfra.org for more information.

Feature article:

Health Care in Rural America: Part II

In this space last month we provided information on rural health insurance coverage and health care access. To summarize:

  • Rural people – especially those in “remote rural counties” – are more likely to be uninsured and uninsured for longer periods of time.
  • Remote rural residents are less likely to be offered health benefits through their employment.
  • The rural economy – dependent on low-wage work and small businesses – leads to a higher rate of uninsured because of market and public policy failures peculiar to that type of economy, namely the cost of health benefits and a lack of affordable benefit options.
  • Rural people have high rates of “underinsurance,” or health benefit coverage that provides less coverage at higher cost.
  • Rural people may not be receiving adequate health care, leading to poorer health and worse health outcomes; the higher rural rates of uninsurance and underinsurance are causes.

This article will discuss potential solutions to these challenges.

Principles to Guide Solutions and Reform
When discussing public policy solutions it is wise to begin with a set of guiding principles. We provide the following (in no order of priority, except for the first fundamental principle) as a beginning set of general principles. Similar principles were suggested by the National Academy of Sciences’ Institute of Medicine Committee on the Consequences of Uninsurance.

  • Universal – because of the long-term health and societal consequences of being uninsured and underinsured, health care coverage should be available to everyone.
  • Continuous – gaps or interruptions in coverage lead to inadequate care and worse health outcomes. This is particularly important for rural people since rural residents lack health insurance for longer periods; any solution must have a long-term focus to assist rural people.
  • Affordable to individuals and families – the primary reason given by businesses, employers, and people for lacking health insurance benefits is cost; the affordability challenge is even greater for low- and moderate-income individuals and families.
  • Affordable and sustainable for society – any reform proposal must be cost-effective and efficient, both to the society as a whole and to individuals and families.
  • Enhance health and well-being – coverage should include those services that provide for long-term health.

Solution Models
There is no lack of ideas or proposals for reforming health insurance coverage and cost. Based on our research of these proposals, we have grouped them in the following models.

Note to Readers: The items below are only an overview of general provisions of detailed proposals; in addition, many different proposals have been lumped together for the sake of space and brevity. We apologize if your favorite solution is not included in sufficient detail.

Incremental Reforms, Program Expansion and Tax Credits
>>Expand Medicaid and State Child Insurance Programs (S-CHIP) to all people below a percentage of the federal poverty level (generally 125-150 percent) and above a certain age (generally 55).

>>Expand Medicaid and S-CHIP by allowing people up to 300 percent of the federal poverty level to “buy into” those programs by paying an income-based premium.

>>Provide tax credits for the purchase of private health insurance for people between 125 and 325 percent of the federal poverty level and for small businesses. Some ideas allow both a credit on federal income taxes and a credit when the insurance policy is purchased (similar to an instant refund upon purchase).

Voluntary Insurance Pools
>>Create voluntary (generally state-operated) insurance plan pools open to individuals, employer groups, and businesses. This is based on the theory that a large group can purchase coverage more cost-effectively than individuals.

>>Most “pool” ideas also include subsidies to low- and middle-income people as incentives to purchase coverage through the pool.

Pay-Or-Play and Employer Mandates
>>Employers would be required to provide a minimum standard of coverage for their employees. Maine and California are states that have recently enacted statewide programs based on this model.

>>Employers who do not provide minimum coverage are required to pay a payroll tax that automatically covers their employees under a new public health insurance program. Non-workers can also obtain coverage under this public program.

>>It is estimated that these types of employer mandate would result in nearly all uninsured people being covered, but with a significant impact on employer costs.

>>Other proposals simply require employers to offer health insurance to employees and contribute to employee premiums. Generally these proposals combine an employer mandate with a federal premium subsidy to the employer.

>>These attempts to increase enrollment in private health insurance – whether through employer or individual plans – have significant impacts on rural people because of the “financial fragility of small rural employers” (University of Southern Maine) and the low wages and incomes of rural workers.

Many rural people and employers do not have the financial means to afford health insurance coverage for themselves, their families, or their employees. For these economic reasons, attempts to enhance work-based health insurance or enrollment in private plans are unlikely to work as well for rural people without generous subsidies.

Individual Mandate and Tax Credit
>>These proposals would mandate that all individuals provide health insurance for themselves and their families through the private market. To address cost issues, each person would be eligible for advance tax credits.

>>These proposals also generally would eliminate all public insurance programs except Medicare.

Market-Based Plans
>>Significant state and federal legislation has opened the way for increased access of individuals, families, and businesses to “market-based health plans” such as Medical Savings Accounts and Health Savings Accounts. The theory behind such plans is to change consumer and societal behavior through public policy (primarily through tax policy).

The current employer-based health insurance system encourages costly comprehensive benefit plans through tax exemptions that rise as the employer’s contribution rise. The “market-based” system theorizes that lower-cost plans that are dependent on consumer choice will decrease costs. These proposals are often accompanied with a tax credit for individuals and families to cover a significant amount or the entire premium.

>>Medical Savings Accounts and Health Savings Accounts are low-cost, high-deductible health plans that allow a limited employer contribution and/or individual contributions. These plans have been offered as ways for the self-employed and small businesses to avoid the increasing cost of health insurance while still providing functional coverage.

Single Payer
>>A single payer system would enroll everyone in a single, comprehensive benefit package. Supplemental private policies would be available for non-covered services. And it is important to note that under single payer systems, the current system of health care services – private doctors, clinics, hospitals, etc. – would remain. Single payer refers only to who pays for and who funds health care services.

Under most single payer proposals the federal government or state governments (with federal funding and support) would administer the program; contractors and private health plans would be used to review and process claims and payments similar to Medicare. All industrial nations other than the United States have some form of a single payer system.

>>Most single payer proposals are financed through a new payroll tax of both employers and employees that would take the place of current premium payments.

>>Coverage in single payer systems would be comprehensive (generally with a menu of options comparable to current public employee plans), with no deductibles and low co-pay requirements. 

>>Virtually all Americans would be covered by a single payer system, with net new federal spending of approximately $1,900 per person (payroll and income taxes).

A Problem That Can No Longer Be Ignored
The United States already invests billions of dollars in health care coverage by directly providing insurance to some (Medicare, Medicaid, S-CHIP programs and public employee plans) and by offering subsidies to others (tax exemptions for business benefit plans and some individual plans). As The Institute of Medicine has stated, “The many consequences of uninsurance and the growing threat it poses to the very fabric of America’s health care system makes this a problem that can no longer be ignored.”

Is health insurance coverage a right or privilege? Should employers or individuals be responsible for or mandated to provide health insurance coverage? And what role should the government play? Please give us your views as we begin a discussion on an issue that impacts the well-being and development of rural people and rural communities.

We want to hear from you! Send your comments to Jon Bailey, jonb@cfra.org 

REAP Works to Foster Steady Job Creation across Rural Nebraska

While the major cities in Nebraska may look to attract a major business or a new manufacturing plant to bring new jobs, those of us in the rest of Nebraska recognize that new jobs depend on the development of small businesses.

With almost 30 percent of non-farm jobs in rural Nebraska created by micro-businesses, the Center for Rural Affairs’ Rural Enterprise Assistance Project (REAP) offers vital assistance to people considering starting their own business.

REAP provides the tools for would-be business owners to not only start their business, but to succeed. REAP organizations offer members basic business trainings, technical assistance, networking, and the all-important access to micro loans.

Last year, REAP provided almost 2500 hours of counseling to individual businesses, completed eight basic business training courses, and three e-commerce training courses as well. In all, 71 training classes were held with over 900 people attending. REAP membership also means access to monthly networking and training meetings to keep the new business owner excited about their business.

Training makes it possible for people to stay in business, but money is vital to get started. Micro businesses can often get underway with smaller amounts of money – micro loans – and membership in REAP can help make those loans possible.

In the last year, REAP made 38 micro loans to small businesses in Nebraska, totaling nearly half a million dollars. For those that needed larger loans, REAP also helped 23 businesses work with banks to leverage an additional $1.3 million in capital.

In recognition that increasing numbers of Nebraska women were contemplating starting a business, the REAP Women’s Business Center was created three years ago. Using the resources pioneered by REAP, the REAP Women’s Business Center is an important link for women who aspire to own a business in Nebraska. Last year, 17 of the 33 start-up businesses helped by REAP were solely owned by women.

Male or female, if you are considering starting a business of your own, REAP is an important step toward making your business a success. To contact the REAP business specialist nearest you, see the REAP link on our website or call Peggy Mahaney, REAP Administrative Assistant, at 402.687.2100.

With rural Nebraska dependent on micro businesses for jobs, this is another example of the Center for Rural Affairs fighting for rural America.

Contact: Glennis McClure, reapwbc@diodecom.net for more information.

Fresh Promises for America’s Rural Places
Presenting strategies and practices that are helping to revitalize rural communities

Swaledale Bio-Village – Business in rural Iowa using available resources ...

Rural communities face challenges in keeping their small towns alive and vital. State spending cuts, school consolidations, and more affect small cities daily. To combat the challenges facing their community, several leaders from Swaledale, Iowa are working together to help their town reverse a downward trend and begin to grow.

Swaledale, population 174, has no grocery store or gas station. Through town meetings held in June 2003, a committee of concerned citizens developed a concept to draw people and businesses to their community. John Drury, former Swaledale mayor, and a team of community members developed an idea for a bio- and regular fuel gas station, certified kitchen, and Iowa products store and restaurant called the Swaledale Bio-Village.

The Bio-Village, located near the I-35 Interstate, will sell both unleaded and diesel fuel, bio-diesel fuel made from soybeans, and up to 85 percent ethanol fuel. The Swaledale Bio-Village will also offer a certified kitchen for people with a food product they would like to sell in a retail store.

The certified kitchen will serve as a business incubator, allowing cooks to turn their small-scale food processing into a business. Retail stores wishing to sell “home grown” products are limited to products prepared in a regulated environment. A certified kitchen meets these legal requirements.

Drury explained, “If someone from North Iowa grows a lot of tomatoes and makes salsa or spaghetti sauce, they cannot sell their product in stores. When the product is produced in a certified kitchen, it can be offered in a retail environment.”

For more information, contact John Drury, 205 6th Street South, Swaledale, IA 50477 or by e-mail at jdrury@frontiernet.net 

Contact: Kim Preston, kimp@cfra.org for more information or to submit ideas for this column.
Fourth Annual Heritage Fest Coming to St. James Marketplace 
Grab a bit of history as citizens of northeast Nebraska celebrate their German heritage with games, crafts, and delicious foods

For a fun-filled, unique experience, St. James Marketplace in St. James, Nebraska (in northern Cedar County) is the place to be on Sunday, September 26, 2004. The 4th annual Heritage Fest will take place on the grounds of the former Ss. Philip and James Parochial School. The event celebrates the heritage of German pioneers who settled northern Cedar County during the middle 1800’s.

On that day you can experience life as it was many years ago. See a classroom of the early 20th century; watch buffalo hair being spun into fabric; watch how homemade ice cream was made – and then TASTE it; watch an old apple press in action; watch how corn used to be ground; participate in wood-cutting contests; visit the Wiseman Monument (site of the massacre of five children of Henson Wiseman in 1863); and walk the area where Pvt. George Shannon was lost during the Lewis and Clark Expedition nearly 200 years ago.

You can let the kids experience old time childhood games, including three-legged races, watermelon-seed spitting contests, and sack races. And throughout the day, you can “shop ’til you drop” and eat real homemade food until you can’t consume another bite! Meat products from Main Bow Farms will be on the grill for most of the afternoon, so bring your appetite.

St. James is located less than ¼ mile north of Scenic Byway 12 in northern Cedar County. The marketplace is WEST of the junction of Highway 15 and Scenic Byway 12, and EAST of the junction of Highway 57 and Scenic Byway 12. Highways 15 and 57 recently swapped places, and older road maps don’t show that.

Contact: Mike Heavrin, mikeh@cfra.org  for more information, or visit www.stjamesmarketplace.com

Trade ‘Framework’ May Signal Shift in Traditional Farm Programs

The “framework” developed by World Trade Organization negotiators could signal the beginning of a fundamental shift away from traditional commodity programs. Or, it may not.

The framework calls for elimination of export subsidies and a 20 percent reduction in farm program payments tied to what and how much a farmer produces. There would be no caps on payments that don’t stimulate production, such as payments based on historical production and conservation and rural development payments.

The framework is essentially a statement of principles. Negotiators will start talks this month on a more detailed agreement. In reality, the 20 percent reduction is more symbol than substance.

It is a cut in the cap on payments in the previous trade agreement, not a cut from the payment levels approved in the last farm bill. Payments under the 2002 farm bill are well below the lower caps proposed in the new framework.

Depending on how the language of the framework is interpreted, it is possible that a 20 percent reduction could constrain the increase in loan deficiency payments that would result if the bottom fell out of commodity markets.

But even that is uncertain. It is also possible that the framework is a first step toward much more aggressive steps to cut traditional farm programs through international trade agreements.

Regardless of which way it goes, the most important decisions that determine whether U.S. policy serves the few or the many will still be made in our Congress and White House.

Our existing commodity programs are not working to strengthen family farms or rural America. Congress could fix that without a trade agreement by cutting payments to mega farms and using the savings to restore cuts in conservation programs and increase support for rural development – especially small business-based rural development.

A trade agreement could also prompt Congress to take those positive steps, but it’s no guarantee. Congress could just as easily respond to a trade agreement by cutting payments to family farms and shifting the money to environmental programs that serve mega farms. For example, the last farm bill authorized a half a million dollar payments to mega-livestock operations to build manure storage lagoons.

An international trade agreement may dictate what kinds of government programs are allowed, but it won’t dictate who they benefit or what kind of agriculture and communities they foster. Those are the important questions. As citizens, we still have the capacity to influence those decisions if we choose to exercise our democratic rights.

Agree or disagree? Send your opinions, questions, or comments to Chuck Hassebrook, chuckh@cfra.org 
Revised:  March 21, 2007  

Editor: Marie Powell