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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 		       October 2004
IN THIS ISSUE:

Feature Articles:
Transition to Organic Made Easier
Vote with Your Food Dollar

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Center for Rural Affairs
PO Box 136
Lyons NE 68038

Community Reinvestment Act (CRA) Loan Programs under Threat
Programs helping low-income communities jeopardized by proposed FDIC changes

In 1977, Congress enacted the Community Reinvestment Act (CRA) to encourage banks and other financial institutions to meet the credit needs of low and moderate-income communities. Congress required banks and other financial institutions to demonstrate they meet the needs of communities in which they do business, including the need for credit.

CRA has proven its worth through assistance that banks and other financial institutions have provided in meeting the economic, social, and human needs of low and moderate-income communities. CRA has pumped over $1.5 trillion in direct economic benefit to communities once without credit or community development. And these are not handouts – CRA loans have to meet the same lending criteria as other loans and generally have a lower default rate.


>> 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. See http://www.farmersforfarmcredit.com

>> Chuck Hassebrook, the Center’s executive director is the keynote speaker at the Iowa Organic Conference to be held at the Scheman Center in Ames, Iowa on November 1, 2004. For more information contact Dr. Kathleen Delate at 515.294.7069 or Andrea McKern at 515.294.5116.

>>A new book looks at ways to keep small schools viable. The Hermit Crab Solution, by Barbara Kent Lawrence, offers communities creative alternatives for improving and sustaining their rural school facilities.  The book costs $18 and can be ordered online from www.ael.org , by calling 800.624.9120, or by emailing distctr@ael.org 

>>The Center for Agroecology at UC Santa Cruz is offering a full-time, 6-month training course in organic gardening and farming starting April 2005. The application deadline is November 1, 2004. Several scholarships are available. For more information, go to http://www.ucsc.edu/casfs  or email apprenticeship@ucsc.edu or call 831.459.3695.

Now, however, the federal government is proposing changes to CRA that have the potential to harm many rural communities.

FDIC is proposing the definition of “small” bank be changed to mean a bank with less than $1 billion in assets (“small” is now defined as having less than $250 million in assets) and to allow banks to choose how they meet CRA requirements rather than following Congress’ intent.

These definitional changes will be acutely felt in rural America. An estimated 99 percent of rural FDIC banks would be able to limit CRA involvement, and no rural FDIC banks in 28 states would be required to follow CRA requirements.

This withdrawal will have a massive impact on programs benefiting low and moderate-income rural people – nearly $10 billion in rural affordable housing and community development initiatives will be lost.
In an era where bottom-line economics dominate so much of our culture, this is a blatant example of yanking the rug from under the communities and people most in need – in need of small business and farm loans, affordable housing, and financial assistance for higher education.

The proposed amendments to CRA will deny many of our rural neighbors and friends an opportunity to realize their dreams and deny many of our communities a last, best chance for a better future.
Killing hope is what this comes down to – that and the loss of yet another tool to make the lives of rural people and the future of rural communities better. The Center and other rural advocates provided comments to the FDIC. We hope they are listening. We’ll let you know.

Contact: Jon Bailey, jonb@cfra.org for more information.

Risk for Agriculture in Climate Change
Biggest winner in a carbon dioxide-rich atmosphere may be farmers’ weeds

In a significant shift, the Bush Administration has issued a new report attributing hotter global temperatures over the last 30 years to atmospheric gases released by human activity – and suggesting troubling consequences for agriculture.

The report is based on the growing body of federal research on climate change. That research cites a challenge for farmers under higher concentrations of carbon dioxide – intensified weed problems. Carbon dioxide is the leading greenhouse gas and is released by burning fossil fuels, removing forests, and breaking down organic matter.

Plants grow better in a carbon dioxide rich atmosphere. But the study found that weeds benefit more than most crops and thus will become more competitive as carbon dioxide levels increase.

The report reminds us how much farmers and ranchers have at stake in climate change. Earlier studies predicted increased extreme weather events and shifts in rainfall. Farmers and ranchers face serious risks in climate change – arguably more than any other industry with the possible exception of the insurance industry.

Yet, some agricultural organizations have rallied farmers and ranchers to oppose efforts to address climate change, fearing efforts to curb emissions would lead to increased fuel and fertilizer costs. That is short sighted.

Farmers and ranchers have a profound interest in addressing climate change. Further, it is a mistake to conclude that any action to address climate change will necessarily impose burdensome short-term costs on farmers and ranchers.

Several years ago, the Center for Rural Affairs convened a task force of farmers and ranchers to study the issue. Their report Climate Change and Agriculture concluded that agriculture could contribute to reducing greenhouse gases through measures that don’t impose high costs, but to the contrary save money – better fertilizer management and fuel conservation. (Climate Change and Agriculture is available on our website.)

They saw new opportunities for farmers and ranchers to be paid for building soil organic matter (carbon), as a means of reducing the carbon dioxide level in the atmosphere. In addition, rural areas are enjoying some new economic activity from the growth of wind power generation as an alternative to fossil fuel powered electric plants. You can find the Bush Administration report at www.climatescience.gov 

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

Teaching Schools and Communities How to Work as Partners
Three main models have emerged to draw students and their communities closer together

Traditional boundaries exist in many small communities between the community and the school system educating their youth. Very little connects the two in a sustainable and positive way. To make a community vibrant and progressive, youth and adults need to work together to address the needs of “community.”

The subject of incorporating schools into the community more effectively has been extensively researched. While models are varied, communities are choosing three major ways to integrate with schools, especially in small rural areas.

The first approach uses the school as a community center. In this model, the school becomes the lifeblood of the community and a major resource. School facilities, technology, and staff provide opportunities for the whole community to participate.

Using technology available in schools, health care and social services may also participate and benefit. Training can be held at the school, and networking provides the social arena needed for helping the community use these services more effectively.

The second approach uses the community as an empirical learning environment. Students help the community by conducting needs assessment, researching environmental issues, and monitoring land-use patterns, for example. By getting students involved with local residents and issues, they value their community more highly and understand the role they play in its future.

The third approach is the school-based enterprise method. The school encourages development of entrepreneurial skills with students in the community. This curriculum encourages students to establish businesses through programs like REAL (Rural Entrepreneurship through Action Learning) or “Mind Your Own Business,” the Center’s entrepreneurship class. Through programs like this, students have started businesses like shoe repair, delicatessens, and day-care centers.

The ultimate test of community and school approaches is the impact they have on the lives of rural youth and adults over an extended partnership. Changing the fundamental nature of interaction between schools and communities helps to prepare rural youth for their futures and to develop skilled leaders for tomorrow.

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

Senate Ag Appropriations Subcommittee Approves Spending Bill
U.S. Senate finally acts on agricultural appropriations and fully funds Conservation Security Program, cuts Value-Added Grants

The Senate Agriculture Appropriations Subcommittee approved their FY 05 spending bill on September 8. The full Senate Appropriations Committee took up the bill on September 14. As reported earlier, the House of Representatives passed their annual agriculture spending bill in July.

Some good news: unlike the House bill, which cut the Conservation Security Program (CSP*), the Senate bill restored full, uncapped funding for the new conservation program.

Unfortunately though, another program we have been advocating for – the Value Added Producer Grants Program (VAPG**) – was again cut, ending up with $15 million versus the $40 million authorized under the 2002 farm bill.

An amendment was also offered to remove the two-year delay on Country of Origin Labeling (COOL), which under the delay is not scheduled to go into effect until 2006. The amendment failed with a tie (14-14), a party-line vote with all Republican’s voting against the measure and all Democrats voting in favor.

It is unlikely this bill will make it to the full Senate for a vote. It may well be combined into one large package with other spending bills during a conference between House and Senate Appropriations Committee members.

The large package of spending bills would then go to the House and Senate floors for an up or down vote. Stay tuned for more information as things progress.

* The Conservation Security Program was authorized in the 2002 Farm Bill as a new comprehensive working lands conservation program designed to provide financial and technical assistance to farmers and ranchers nationwide who use conservation systems that contribute to clean water, clean air, wildlife habitat, soil improvement, and global warming mitigation.

** The Value-Added Producer Grants program provides funding to help develop new markets, products and cooperatives, returning a greater share of food system profits to farmers and their local communities. It includes funding for farmer-owned sustainable and organic farm enterprises and marketing efforts to add value to products.

Contact: Traci Bruckner, tracib@cfra.org for the latest news on agricultural appropriations.

Corporate Farming Notes
Farm Credit Administration plans field hearings; Senators and farmers concerned with livestock mandatory price reporting; groups oppose market concentration

>> The Farm Credit Administration (FCA) will hold public hearings on the controversy surrounding Omaha-based Farm Credit Services of America’s potential sellout to an international conglomerate.

FCA is the government regulator charged with overseeing the Farm Credit System. Plans are to hold hearings in the affected states – Nebraska, Iowa, South Dakota, and Wyoming. The hearings will require Farm Credit Services of America to explain why the board believes the Rabobank offer should be considered over the competing bid offered by AgStar, the Minnesota-based farm credit institution (see our September 2004 newsletter for more details).

If the offer submitted by AgStar were accepted, the newly merged entity would continue as a member of the Farm Credit System, and borrowers would retain the same rights and protections they currently have as System members. If the Rabobank offer were accepted, the FCSA would become a private lending corporation, which would not provide the same borrower protections.

Stay tuned for more information regarding hearing dates and locations.

>> Due to concerns over whether or not Livestock Mandatory Price Reporting (LMPR) is providing accurate information, Senators Harkin (D-IA) and Grassley (R-IA) have requested an investigation by the General Accounting Office (GAO).

Concerns that have surfaced include whether and how USDA branches are coordinated so that USDA can effectively enforce regulations governing the program, the degree of transparency in reporting, and the timing of packer reports.

The questions regarding the accuracy of reporting center on the base price the packers are reporting. Packers are allowed to pay premiums for different things including meeting certain quality or quantity standards. These premiums are not being figured into the base price the packers report to USDA. Base prices are used when figuring the formula sales price.

The LMPR is set to expire on October 30 unless Congress acts to extend the law.

>>The National Campaign for Sustainable Agriculture is sponsoring a sign-on letter to urge Congress to make agricultural competition and market concentration top priorities as Congress crafts agricultural legislation next year.

The letter calls for enactment of:

  • Prohibition on Packer-Owned Livestock
  • Producer Protection Act
  • Transparency/Minimum Open Market Bill
  • Captive Supply Reform Act
  • Clarification of “Undue Preferences”
  • Closing Poultry Loopholes in the Packers & Stockyards Act
  • Bargaining Rights for Contract Farmers
  • Mandatory Country of Origin Labeling

The letter states, “Today, a small handful of corporations overwhelmingly dominate the nation’s food supply. The market control of the top four firms in food retailing, grain processing, red meat processing, poultry processing, milk processing, and nearly every category of food manufacturing is at an all time high.” The Center is assisting the Campaign to gather signatures. See the sign-on letter on our website.

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

Feature articles:

Transitioning to Organic Made Easier by Incentives

The difficult, and sometimes scary, process of transitioning to organic production just got easier for farmers and ranchers in northeast Nebraska. Last spring, members of the local technical committee of the Lewis and Clark NRD (Cedar, Knox, and Dixon counties) decided to include an incentive payment to grain farmers wanting to qualify their cropland for organic production.

The incentive is provided through USDA’s Environmental Quality Incentive Program (EQIP). This is the same program that provides cost-share for cross-fencing, water lines, retention structures, as well as terraces, windbreaks, and other NRCS programs.

Successful applicants will receive $50/acre (120 acres maximum) each year for three years after which they must qualify for organic certification. The payments will minimize some of the risks farmers face when changing to organic production.

Making the Grade
To sell products in the organic market, USDA requires that land be chemical-free for a period of 36 months at the time of harvest. The premium prices of $5.50 for corn and $18 to $20 for soybeans are inviting, but many see the transition phase as too difficult to overcome. During the transition phase, growers have to farm without the farm supplements but are not eligible for the premiums. Major concerns include yield drag, machinery, facilities, and lenders.

Yield drag means yield reduction. In the absence of chemical supplements, crop yields may decline because the soil life needs time to adjust its populations to provide soil fertility through nutrient recycling and direct absorption of nutrients from the air.

Crop reductions are more severe with high-energy crops with high nutrient needs. One option to avoid losses is to move to crops with low-energy needs, such as a legume or forage crop to replace a grain crop. Once the transition is made, most organic soils produce yields of 95 percent or more of conventional soils.

Organic incentives can compensate for the need for more and varied equipment. Additional tillage or weed control equipment, and/or equipment needed for adding another crop requires more investment. Although machinery expenses can be offset by reduced fertilizer and pesticide purchases, it remains a serious consideration when a farmer is deciding to change production practices.

EQIP incentives can minimize the need for facility and storage investments. On-farm storage is recommended to maintain crop integrity. The need for identity preservation and delayed delivery means crops must be kept separate and stored for a time after harvest. Organic farmers have a need for many small bins rather than a few large ones – opposite the trend of most grain farmers.
The incentives will help relieve the concern of lenders as well. With a significant stake in the financial success of most farmers, these institutions need to see a risk management plan capable of defraying perceived or real yield losses. Also, since much of the organic production is not sold at the time of harvest, lenders need to adjust their timeline for repayment.

The Process
If you want to participate in this program, the first step is to get approval for an organic incentive program from your local technical committee. Usually made up of local NRCS, NRD, and Extension individuals, this committee determines the environmental priorities for the district.

EQIP cost-share and incentive programs address these priorities. Impact scores are assigned for different practices. These values determine how well an application will rank. Since EQIP contract awards are based on the amount of environmental impact per dollar invested, high scoring applications are more likely to be funded.

After the deadline, typically in April, EQIP applications are sent to the state NRCS office to compete with other EQIP applications. All applications are scored and awards given until all the funds are accounted for. However, the contract is not binding until signed – usually in mid-summer.

The requirement for chemical-free practices doesn’t begin until the following growing season. Farmers in the program must contact an approved National Organic Program (NOP) certifying agency to inspect their operations and verify compliance before receiving the annual incentive payment. After the third year, the acres enrolled in the program must be certified organic. Only first-time organic farmers are eligible for this program.

Although organic practices were the conventional agriculture system for many generations, few farmers today are skilled in the art of natural food production. These financial incentives will help offset some of the financial risk, but training and skill development are still needed to be successful with organic production. By working closely with an experienced organic farmer, candidates can learn to overcome the major unknowns of organic farming: fertility, weed pressure, markets, yields, and certification requirements.

Contact: Martin Kleinschmit, martink@cfra.org or 402.254.6893. Also visit with your local NRCS office for more information.

Vote with Your Food Dollar to Support Family Farms

Today’s surging interest in safe, healthy foods has been matched with foods emblazoned with claims for how and where they were produced and offering to make buyers feel good physically and emotionally. Not only can we benefit personally from our food purchasing decisions, so too can we benefit our environment and our society.

The USDA Sustainable Ag Research and Education (SARE) program points out “As a customer, your food-buying dollars become your clout, and where you choose to spend those dollars is your vote for or against food production methods.” How do we make the most of that weighty responsibility?

The constantly expanding list of attributes attached to food production systems encompasses:

  • environmental impacts (soil, water, air, climate)
  • biological impacts (biodiversity, wildlife habitat, genetic purity, animal welfare)
  • social justice impacts (worker welfare, farm-share of price, factory/family farm system, community, demographics, consumer-to-farmer relationships)
  • natural resource impacts (energy, soil quality, wastes)
  • human health impacts (pesticide residues, processing, whole foods, nutrient content)

and perhaps others.

Each of these attributes has ardent advocates; unfortunately, attributes may conflict with each other. Ultimately, the decision to support one or another attribute is a personal one. But to make that decision requires information about each product, and it requires an educated purchaser. Product labels (and enforcement of honest labeling) may provide adequate information to an informed purchaser, but how does one become informed about these myriad of choices?

These food labels are often called “eco-labels” because of their environmental implications. A recent book discusses many of these issues, Eco-Foods Guide: What’s Good for the Earth is Good for You, by Cynthia Barstow (New Society Publishers, 2002). She covers many of the drawbacks of the conventional food system, then presents alternatives such as CSAs, organic, and local, in addition to special considerations such as fair trade, factory farms, and seasonality. This list encapsules her shopping checklist:

  • Was it grown locally?
  • Is it in-season?
  • Was it organic or grown with Integrated Pest Management (IPM)?
  • Was it grown at a small family farm?
  • How was it processed or preserved?
  • Were antibiotics or growth hormones used? Was it factory raised or free range?
  • Was it fairly traded and/or sustainably sourced?
  • Could I buy this closer to the farmer: at a farmer’s market or community-supported farm?
  • Does it contain genetically modified organisms (GMOs)?
  • Does it encourage stewardship?

The SARE office has two simple publications that might help you as well: Exploring Sustainability in Agriculture and How can you support sustainable ag in the marketplace? are one-page discussions of these concepts. The materials are available at 802.656.0484 or online at www.sare.org/publications/explore/support.htm 

Additional resources cover nutritional and environmental benefits of grass-fed livestock http://www.eatwild.com ; fair-trade products and economic impacts of production systems http://www.foodroutes.org ; and cultural aspects of food http://www.slowfoodusa.org . The Ohio Ecological Food and Farming Association published A Dozen Reasons to Buy Local and Organic http://www.oeffa.org/12.html  and Consumers Union keeps a list of ecolabels and what they mean http://www.eco-labels.org . Fresh Choices, a recipe book, discusses how to avoid pesticides and other food concerns, from www.generationgreen.org . The Lane County Food Coalition (Eugene, Oregon) hails local foods for community and environmental betterment http://www.lanefood.org .

Our perspective is that the family-scale farming system can be the basis for making purchasing decisions. That system holds the most potential for incorporating all of the attributes: environmental stewardship, local food systems, fair prices, food safety and quality, biodiversity, and animal welfare.

As one farmer put it, “When you buy direct from the farm, you can work to convince your farmer to make changes in his production system, since you buy his crops.” It was these farms that built the organic farming movement, fostered the rebirth of farmers markets, defined sustainable agriculture in the US, and can identify with small farmers in other countries. These types of farms support local communities economically and with their personal involvement.

We each vote with every food purchase. This is the way to ‘vote early and vote often’!

Contact: Wyatt Fraas for more information, by email wyattf@cfra.org or reach him in our Hartington, Neb. office at 402.254.6893.

REAP Direct Loan Program Grows Significantly over the Year
With loans from $100 to $25,000, the Center’s REAP program is helping to build Nebraska’s rural small business sector.

The Center’s Rural Enterprise Assistance Program (REAP) created a Direct Loan Program in 1998 to complement their smaller, group-based Peer Loan Program. Businesses that had successfully used peer loans had growing needs beyond those loan levels yet not high enough to be served by traditional lenders. REAP also had new microentrepreneurs who needed more funds starting out than could be met by Peer Loans.

In the past fiscal year, REAP placed 38 Direct Loans totaling $514,900. These loans and extensive client technical assistance also leveraged over $640,900 in additional debt financing from traditional lenders, other revolving loan funds, and private sources during this time. Since inception of the Direct Loans, REAP has placed 139 Direct Loans totaling $1,948,408.

The REAP Direct Loan Program is helping to leverage other funds. REAP provides business planning services to REAP members. These services have resulted in leveraged lending in many instances. A REAP client has completed her or his business plan in consultation with the area REAP Business Specialist and has been able to secure loans from a traditional lender, development district, community action agency, or a local loan fund.

REAP staff have also helped in “packaging” loans that include other lenders in addition to REAP’s loan fund. Historically, REAP has “leveraged” loans totaling $4,009,820. Jeff Reynolds, REAP program director said, “It has always been REAP’s goal to meet the debt financing needs of all members – individually or by collaborating with partners. The REAP Direct Loan Program is effectively meeting this need.”

Reynolds also looks forward to adding additional lending products to the product mix. Current REAP lending products (REAP Direct, Peer, and Quick Grow) can be viewed on line. For more information about REAP loans, contact Jeff Reynolds at jeffr@alltel.net or 402.656.3091.

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

Marketplace of Ideas has been at the forefront of North Dakota’s economic development efforts for 15 years. Their goals and mission speak volumes about what they have to offer to rural communities and the state of North Dakota.

An annual convention convenes each year in January; the 2005 convention will be held in the Bismarck/Mandan area on January 12-13. Marketplace has developed into a statewide institution connecting people who are looking for and using new ideas for growth in North Dakota’s rural economy. These ideas are presented and discussed at different times and events throughout the year.

The mission is simple: empower individuals and communities to pursue their economic development visions by providing a forum for ideas, information, and assistance. The goals reflect what states should be doing to help their communities accelerate community development in their most remote areas.

By stimulating, encouraging, and assisting North Dakotans of all ages and walks of life to envision and investigate ideas for supplementing income and creating new enterprises, community leaders will be inspired to take action and make their area and North Dakota an attractive place in which to live and to work.

First held in January 1989 with approximately 500 farmers and ranchers in attendance, the main goal was to encourage and assist them in becoming the trusted providers of the highest quality food in the world, add value to products, and diversify land use as the most promising way to raise net farm income, create employment, and assure community growth.

Today, the event strives to provide a network of information, assistance providers, and people who are already engaged in alternate activities to accelerate acceptance of innovative opportunities and to support those who have begun new enterprises.

The annual event has grown to a two-day attendance of more than 7,000 people. Visitors can choose from a variety of classes available, over 120 each year, and can visit over 250 exhibitors and presenters ready to serve them and their small business needs.

For more information, visit their website, www.marketplaceofideas.com or call 1.888.384.8410 or through email marketplace@btinet.net 

Contact: Kim Preston, kimp@cfra.org for more information or to submit ideas for this column.

Intern Energizes Beginning Farmer Work
The Center has a new, young face around the office until January. We are pleased to give our intern the opportunity to introduce herself below.

My name is Amanda Tuttle, and I am the new intern at the Center for Rural Affairs from Marshalltown, Iowa. I am a senior at the University of Iowa (Hawkeyes), and will soon receive my B.A. in International Studies with an emphasis on environmental policies.

At the Center I’m working on several projects. One is working with the Leopold Center to redirect federal grant loans to more small and mid-size farms. Another main effort is the beginning farmer Land Link program. I am trying to connect beginning farmers to retiring farmers to enable the beginning farmer to have a smooth and successful transition into their enterprise. I have also taken a keen interest in revision of Nebraska’s Beginning Farmer Tax Credit provision.

In my free time I am the Lyons-Decatur assistant cross-country coach for the boys and girls. I love to run, hike/backpack, and to socialize. My internship at the Center will finish in January of 2005.

Meanwhile you can contact Amanda at 402.687.2100, extension 1007 or through email at amandat@cfra.org  Welcome aboard!

Testimony on Tax Incentives before the Senate Finance Committee 
Invited by Iowa Senator Grassley, Chuck Hassebrook testified on behalf of the Center for Rural Affairs at a hearing in Sioux City

Senator Chuck Grassley brought the U.S. Senate Finance Committee to Sioux City, Iowa in August for a hearing on tax incentives for rural revitalization – and invited the Center for Rural Affairs to testify. The Center’s recommendations included:

  • Emphasize small business in rural development.

The Senate JOBS tax bill would provide Rural Investment Credits of $185,000 per eligible county – those that have suffered a 10 percent population decline. We urged the credit be adopted, but refined to allow more credits to go to small business.

As written, up to 10 percent of the credits could reward investments in small owner-operated businesses with five or fewer employees. The other 90 percent would go for investment in buildings.

  • Change federal tax laws to enable state beginning farmer loan programs to help more people.

These programs fund low-interest loans by providing a federal income tax break to investors who buy the bonds that provide loan funds. Senator Grassley has introduced legislation to allow states to expand those programs.

The Center endorsed that proposal and suggested that USDA be allowed to guarantee loans made through state beginning farmer programs. That would allow retiring farmers who sell land on contract to beginning farmers to receive tax-free interest and a federal guarantee that they’ll be repaid.

  • Exercise caution in creating new tax breaks in agriculture.

We urged careful scrutiny of proposed legislation to exempt livestock production cooperatives from federal income taxes. That could grant a competitive advantage to large industrial livestock operations over independent family farm livestock producers.

Agriculture was fertile ground for tax-shelter investments prior to the 1986 tax reform act, and the results were not good. It stimulated over investment that drove down profits and helped large farms and high-bracket investors squeeze out family farms and ranches.

In other testimony, Shane Tiernan of the Grundy National Bank of Grundy Center, Iowa proposed federal help for machinery cooperatives aimed at lowering machinery costs for mid-size and beginning farmers. Testifiers expressed support for the New Homestead Act, which was the source of the Rural Investment Tax Credits placed in the JOBS tax bill by Senator Grassley. The Senate JOBS tax bill is awaiting a conference committee to work out differences with the House bill.

The New Homestead Act is being promoted in the Senate by Byron Dorgan, Chuck Hagel, Tim Johnson, Sam Brownback and 13 others and in the House of Representatives by Tom Osborne and Earl Pomeroy.

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

Essay: We Need a Constructive Contest of Ideas

We can only solve problems in America if competing voices wage the contest of ideas in a constructive manner – a manner that enables them to come together where they can find agreement and move forward to serve the common good.

We seem to have lost sight of that. Congress is paralyzed by partisan division. Each party is focused on using issues to gain an advantage in the next election rather than addressing issues to solve the nation’s problems.

The solution is not to paper over important philosophical differences. For democracy to work, we need intense debate over competing ideas. Without it, we become stale and have no reservoir of ideas to draw on when approaches fail. And, in the absence of intense debate, weak ideas are accepted as good ideas.

But the contest of ideas must not give way to a contest of warring factions – of competing camps trying to crush each other. When that happens, it becomes difficult to advance solutions to pressing problems. Issues get lost. Thus today, neither party feels compelled to advance a meaningful rural agenda because most of us jump into our own partisan camp without demanding it.

Those challenges are mirrored closer to home. Agricultural organizations divide into two camps over industrialization of agriculture and spend much of their energy fighting each other. We need to have that contest of ideas over critical issues like the industrialization of agriculture. The issue is too important to paper over.

But we also need to find ways to engage one another in discussion. For example, we encourage family farmers to get active in farm commodity groups to influence their position on farm program payments limitations.

People in those groups do not all think one way. Some share our views. Some don’t. Only by engaging with them and debating issues can we hope to build the broad support needed to move forward.

We are stuck in place in rural America, with a status quo that is not working for us. We need to break the stalemate and advance. That requires talking with those on opposing sides, challenging stale thinking, and searching for solutions on which we can agree and work together, as we hold fast to our principles.

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

Editor: Marie Powell