Key Farm Policy Issues For 2006

As we head into 2006, there are many unresolved farm policy issues that will likely be on the front-burner in the coming months. Depending on the course of action by USDA, Congress and others, some of these issues could have an impact on Midwest farm operators. Following are a couple of the key farm policy issues for 2006:

WTO Negotiations
The World Trade Organization (WTO) Ministerial meeting was held in Hong Kong in mid-December, as part of the continuing Doha Round of WTO trade negotiations. There were very few final policy agreements at the recent WTO meetings; however, following are some items that were agreed upon:

It was agreed that the three “main pillars” for the Doha Round of WTO negotiations are Export Competition, Market Access, and Domestic Support. They also agreed to an elimination of Export Subsidies by 2013, and a deadline of April 30, 2006, to have “Models” developed for proposed WTO revisions in tariffs, domestic support programs, and export programs.

New Farm Bill
The current Farm Bill was passed in 2002, and was set up to govern farm commodity programs from 2002 through 2007, meaning we have less than two years remaining on the current Farm Bill. There has already been considerable discussion regarding the new Farm Bill by members of Congress, Farm Organizations, and others interested in agriculture policy. The Federal Budget Deficit, WTO Trade Negotiations, and Renewable Energy, are all likely to be key factors in the development of the next Farm Bill. Following are some other items and issues that could affect the next Farm Bill:

-More attention is being paid to the overall amount of farm program payments being paid to individual producers by the EWG web site, and by others. Producer payments are listed on the EWG web site at : www.ewg.org.

-Bi-partisan support in Congress to revise and reduce the current payment limits.

-Increasing support for more spending on Conservation programs, and to have conservation compliance be more linked to commodity program payments.

-Concern regarding the impact that farm program payments are having on rapidly rising land values and land rental rates.

-Attempt to set up a permanent agriculture disaster assistance program that is linked to crop insurance programs.

-Inclusion of vegetable crops, other crops, and livestock more directly into farm program opportunities.

-Concern over a potential “Bird Flu” pandemic, terrorism in the food supply, and other Homeland Security issues.

-The 2006 Congressional Elections, which could potentially change some of the Congressional Leadership that will be involved in writing the next Farm, Bill.

This year promises to be a very interesting year on the Ag Policy front, with continued discussion and debate on the Federal Budget Deficit, the WTO Trade Negotiations, development of Renewable Energy, and the writing of the next Farm Bill. There is growing support in Congress to consider extending the current Farm Bill another one or two years to allow more time to incorporate some of the other issues. It should be interesting to watch this unfold, especially in 2006, which is a major election year across the U.S.

Editors note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.