The current combination of existing and proposed farm programs encourage overproduction, subsidize farm consolidation, foster planting choices dictated by the program rather than market, and reward planting on marginal land and the overuse of agrichemicals.

Supply management provisions, a staple of federal farm programs for 60 years, were taken away by the 1996 Freedom to Farm act, removing the brakes and leaving only the accelerator in the farm program tool kit. The resulting tumbling prices leave rapidly rising government bailouts as the only "solution" to farm economic woes.

Farm program payment limitations, included in the last 30 years of farm bills, are now shot full of loopholes. Adding insult to injury, in each of the last two years, Congress has doubled the total nominal payment limitation to an astounding $460,000 per farm -- and that is before application of some of the more inventive loopholes. As a result, taxpayers are forced to pay the largest farms a subsidy that can be used to outbid beginning and other neighboring farmers for any land on the market - paving the way to the decline of a widely-dispersed family farm agriculture.

Planting flexibility, one of the few improvements made in the 1996 farm bill, unfortunately applies only to the Agricultural Market Transition Act (AMTA) payments. AMTA payments are now dwarfed by loan deficiency and marketing loan gain payments which are locked in to production of only the handful of major program crops. This means farmers are once again encouraged to make choices based solely on the availability of crop-specific government payments, rather than to make choices based on the market or what is good for the environment. The result is a lack of diversity and an incentive to plant on marginal land and make intensive use of fertilizers and chemical crop controls to maximize production and payments.

Much has been said recently about the need for additional "counter-cyclical" payments. Many farm and commodity groups are endorsing this idea as a way to recapture some of what was lost in the Freedom to Farm bill. In all the proposals on the table to date, however, these payments would be made on top of existing loan deficiency and other payments and would be made on a crop specific basis to only the major program crops. Hence, the new proposals would result in a new barrier to the adoption of sustainable farming systems, penalize producers providing conservation benefits, and continue to encourage excess production and low prices.

Clearly counter-cyclical payments, while perhaps a part of a possible solution to the current mess, are by themselves only going to make things worse. In addition to the obvious need for comprehensive planting flexibility and a complete overhaul and tightening of the payment limitation provisions, we need some short term supply management tools. If we continue to push fence-row to fence-row farming, we ensure continued need for emergency bailouts during bad times. While there should be no returning to the failed set-aside policies of the past, a forward looking program would reward voluntary action to reduce production in ways that simultaneously benefit the environment. Short term, flexible land diversion and extensification options targeted to conservation goals, coupled with a reinstitution of a farmer-owned reserve to allow extended storage and more marketing options, would provide much needed tools for addressing the current crisis.

Ultimately, however, farm subsidies need to be transformed from propping up a "production at any cost" system -- whether under the guise of "freedom to farm" or "safety net" rhetoric -- to a means to help farmers adopt cost-cutting and value-enhancing measures to increase their share of the food dollar and a means for the public to help bear the cost of investments in sustainable natural resource use, environmental protection, and healthy rural communities. The time has come to talk seriously about evolving a farm program for the 21st century based on stewardship incentives and market-based innovation that includes all types of farms and all regions of the country and is targeted to family farms and environmental enhancement.

Ferd Hoefner is the Washington Representative for the Sustainable Agriculture Coalition and serves on the Board of Directors of the National Campaign for Sustainable Agriculture.

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