Local, National Farmers Union look at challenges, farm bill

April 25, 2011

Wayne Shaffer (right), president of the local Farmers Union, presents National Farmers Union Director of Membership Shannon Schaffer with a gift at a recent meeting of the Farmers Union. (Photo by Matthew Steffy/The Punxsutawney Spirit)

ROSEVILLE and WASHINGTON — The Jefferson-Clarion-Clearfield County Farmers Union met recently at the Roseville Grange. Members primarily discussed high costs of production and the pending farm bill.

Larry Breech, president of the Pennsylvania Farmers Union, and Shannon Schaffer, director of membership for the National Farmers Union, encouraged union members to get involved as Congress begins to construct the farm bill that will take effect in 2012.

“He who cries out the loudest is the one who gets heard,” Breech said. “Everybody needs to stay active. Now is the time to get involved.”
The local farmers’ voices will be needed for the bill, Schaffer said: “It is rooms like this that start ideas that end up being part of national policy.”

The national policy will take the form of the farm bill, which is approved every four or five years, Roger Johnson, president of the National Farmers Union, said.

The farm bill was last approved in 2008, and is set to expire Sept. 30, 2012. The farm bill that will take its place is now under construction, and Johnson said production costs and commodity prices are of great concern during the process.

The farm bill provides farmers with what Johnson called a “safety net” that assures a return on commodities that may drop in price from one year to the next. That safety net is of the greatest relevance to farmers, as the majority of the farm bill supplies funding for food stamps, school lunches and WIC programs.

“The purpose of the farm bill is to provide a safety net for difficult times when markets fail and farmers are actually losing money,” Johnson said. “The idea is that society will pick up the difference so the farmers can survive, because it is in all of our best interest to make sure we don’t run out of food.”

The safety net will likely be vitally important to farmers in the near future, because commodity prices are currently high on corn, grain and soy beans.

Commodity prices become high when there is tight supply and adequate demand, Johnson said. On the surface, it would appear high commodities are beneficial for a farmer, because the crop they produce is worth more money.

What happens, however, is the production costs for those commodities increase “very rapidly,” Johnson said.

The market then becomes inundated with the commodity, causing the market price for that commodity to drop sharply and stay low for a long period of time.

“When the commodity falls, it takes a long time for the production costs to fall,” Johnson said. “That drag time puts a big squeeze on farmers. It is a basic characteristic of agriculture.”

The “squeeze” on farmers will be exacerbated by high fuel prices, which also directly reflect the cost of fertilizer and overall production costs. That pinch on farmers could be right around the corner, Johnson said.

“If we know anything about economic history, commodity prices will not be high either next year or the year after that,” he said.

How does this “squeeze” play into the farm bill?

Johnson said farmers are actually at risk because the farm bill is being constructed while commodity prices are high.

That means that congressmen and senators see farmers turning a profit and assume that the safety net is no longer needed.

“People in Washington sometimes forget the economic patterns of agriculture,” Johnson said. “When times are good, they assume they will stay good for a long time.”

Schaffer and Breech said they understand that funding will, in all likelihood, drop from the current levels. They agree with Johnson, though, that the safety net on commodity prices is the most important aspect of the farm bill.

“Those are exactly the conversations that we are having right now in the Agriculture Committee,” Johnson said. “We are actively taking part in those conversations.”

The Farmers Union’s stance in those conversations is dictated by communication with local Farmers Union meetings, like the one held in Roseville recently. While continuing to provide input to the National Farmers Union is important, Johnson asked area farmers to contact legislatures as well.

“The most important thing they can do is talk to their representatives and say, ‘We know prices are high right now. They are not going to stay high very long,’” Johnson said.