Cruel to be Kind: How Kind-Flake Guts the Farm Safety Net KIND-FLAKE: REPEALING THE FARM SAFETY NET. Representatives Ron Kind (D-WI) and Jeff Flake (R-AZ) and supporters of their legislation, H.R. 2720 or "FARM21," claim they offer "reforms" to the farm safety net - but their legislation would actually gut the farm safety net by completely repealing it - much of it immediately and the rest over a short period of time. FARMERS AND RANCHERS "WOULD NOT BE ABLE TO SURVIVE" KIND-FLAKE UNDER EVEN A MODEST DROP IN PRICES. According to a new independent study, soon to be released, while some farmers and ranchers might be able to survive Kind-Flake in times of higher commodity prices, economic experts state that representative farms and ranches "would NOT be able to survive" even a modest dip in prices unless Congress approved additional emergency relief, which is both costly and unbudgeted. KIND-FLAKE REPEALS THE SAFETY NET FOR FRUIT AND VEGETABLE FARMERS. Kind-Flake would immediately REPEAL the key safety net for fruit and vegetable producers, a move that the Specialty Crop Farm Bill Alliance estimates would cost fruit and vegetable farmers more than $3 billion every year. (See September 20, 2006 testimony before the House Agriculture Committee). Hardest hit would be fruit and vegetable producing states, such as Arizona, California, Florida, Michigan, Ohio, and New York. (See Section 103(d) of H.R. 2720). KIND-FLAKE REPEALS AND PHASES-OUT THE SAFETY NET FOR DAIRY FARMERS. Kind-Flake would immediately REPEAL the Milk Price Support Program, the most basic safety net for our nation's dairy farmers that helps guard against the lowest of low prices. (See section 105(a) of H.R. 2720). Support provided by the Milk Income Loss Contract (MILC) program would also be cut in half and then sunset in 2012. (See section 105(b) of H.R. 2720). The other half of the MILC payment would only be available from a "risk management account" with strings attached. For example, to access the account, the dairy farmer's adjusted gross income would have to drop below 95% of the previous 5 year average even though 3 of the previous 5 years involved depressed milk prices, with one year marking a 25-year low. The scheme also ignores principal debt repayment on land and equipment loans which must be paid with net income. The dairy farmer could also request the funding from the Secretary to avoid insolvency, or if the funding is used to purchase crop insurance or make an investment. But, by barely escaping insolvency or to simply receive funding in order to spend it on what Washington tells a farmer to is no safety net at all (See Section 102(h) of H.R. 2720). Hardest hit would be dairy producing states, such as California, Michigan, Minnesota, New Mexico, New York, Pennsylvania, Vermont, and Wisconsin. KIND-FLAKE REPEALS THE SAFETY NET FOR SUGAR FARMERS. Kind-Flake would immediately REPEAL the no-cost U.S. sugar policy and unilaterally disarm U.S. sugar cane and beet producers to a torrent of world dump market caused by high foreign subsidies and tariffs. (See Sections 106(a) and (c) of H.R. 2720). Hardest hit would be 19 sugar producing and processing states, including California, Colorado, Florida, Hawaii, Louisiana, Michigan, Minnesota, and Texas. KIND-FLAKE REPEALS AND PHASES-OUT THE SAFETY NET FOR FARMERS OF WHEAT, CORN, GRAIN SORGHUM, BARLEY, OATS, COTTON, RICE, SOYBEANS, OTHER OILSEEDS, WOOL, MOHAIR, HONEY, DRY PEAS, LENTILS, CHICKPEAS, AND PEANUTS. Kind-Flake would immediately REPEAL the heart and soul of the farm safety net for millions of farmers by immediately eliminating the non-recourse marketing assistance loan that provides a basic level of protection against the lowest of low prices for these farmers. Kind-Flake would also REPEAL in one year the countercyclical program that restored the safety net in 2002 to avoid future need for additional costly and unbudgeted ad hoc emergency economic relief. (See Section 106(a) of H.R. 2720). Direct Payments would be PHASED-DOWN AND OUT between 2008 and 2014, to 65%, 45%, 20%, and 10%. (See Section 103(b) of H.R. 2720). But, even that level of Direct Payments is not available to farmers because an increasing percentage (50% in the first 2 years, 75% in the second 2 years, and 100% after that) would be withheld in an account that can only be accessed by the farmer under very limited circumstances. For example, the farmer's adjusted gross income would have to drop to 95% of the previous 5 year average even though 4 of the previous 5 years involved depressed prices. This scheme also ignores principal debt repayment on land and equipment loans which must be paid with net income. The farmer could also request the funding from the Secretary to avoid insolvency, or if the funding is used to purchase crop insurance or make an investment, again not much of a safety net. (See Section 103(f) of H.R. 2720). However, even a portion of the amount of Direct Payments that would be made available directly to the farmer or rancher would still be withheld unless the farmer performs certain activities on the farm or ranch, to be determined, that cost money to implement, effectively rendering the Direct Payment meaningless. (See Section 103(g) of H.R. 2720). Few, if any, States would avoid the economic harm caused by these provisions given the breadth of crops impacted. KIND-FLAKE WOULD HURT CROP INSURANCE. Kind-Flake would cut the Federal Crop Insurance Program by reducing reimbursements for the delivery of this important safety net, which may be weathered in times of higher commodity prices but which could adversely impact delivery in times of lower prices or heavy losses without critical safeguards. These cuts would come without safeguards at a time when Members of Congress are seeking to bolster crop loss protection to avoid the need for future ad hoc emergency disaster relief. (See Section 108 of H.R. 2720). KIND-FLAKE WOULD HURT RANCHERS AND OTHER LIVESTOCK PRODUCERS. The harm caused by Kind-Flake would not stop at row crop, dairy, sugar, or fruit and vegetable farmers, but would also hurt ranchers and other livestock producers, according to a soon to be released independent study. Virtually every State in the country would feel the adverse economic impacts of "FARM21." KIND-FLAKE WOULD HURT CONSERVATION. Kind-Flake would also hurt, rather than help, highly successful conservation efforts under the Farm Bill, with many farmers and ranchers no longer able to afford to implement cost-share conservation practices that promote and protect clean water and air, wildlife and wildlife habitat, wetlands, and soil. While proponents of "FARM21" suggest that increased conservation funding would somehow keep farmers and ranchers on the land in order to carry out conservation practices, a soon to be released study indicates that economic experts doubt that claim. KIND-FLAKE: A GOOD BILL OR A BILL OF GOODS? No color brochure can remake the Kind-Flake legislation into something positive for this nation's farmers and ranchers - no matter what State they are from, what size they are, or what commodity they produce. The equity this legislation offers the nation's farmers and ranchers is an equal share in nothing. And, as ironic as it is sad, the first exodus under a Kind-Flake Farm Bill would be small and beginning farmers and ranchers in whose name, if not interest, "reform" is being advanced. The Kind-Flake legislation is nothing short of a total effective repeal of the farm safety net for fruit and vegetable, dairy, sugar, and row crop farmers who not only feed and clothe us as no people in history has ever been before, but who carry out critical conservation practices - practices they can only perform if they can afford to. Under Kind-Flake, all that would remain of a safety net for American farmers and ranchers would be (1) "risk management accounts," the access to which would be very limited and the matching funds provided by the federal government sharply declining and ultimately phased-out; and (2) a recourse loan program to sugar and row crop farmers, providing no safety net at all. Under Kind-Flake, many farmers and ranchers would no longer be able to afford something most of us take for granted - meaningful insurance coverage - much less participate in cost-share conservation programs, with these being just two immediate side-effects of this legislation that would become even more pronounced if (when) commodity prices drop. HOW WILL WE MEASURE SUCCESS? By all measures, current U.S. farm policy has been a success. On budget, the farm safety net is expected to come in $25 billion under budget. It accounts for less than one-half of one percent of the Federal budget. It accounts for just 13% of the U.S. Department of Agriculture's budget. On consumers, Americans spend less of their disposable income on food than any other developed or developing country, less than 10%. We have the safest, most abundant, most affordable food and fiber supply in the world, seldom even thinking about the safety of the food we eat. On the economy, agriculture still matters, as was reported by the Wall Street Journal on December 19, 2003, as agriculture carried many States through the manufacturing slump. 25 million American jobs, 17% of the GDP, and $3.5 trillion per year in economic activity. On equity, despite claims that U.S. farm policy disadvantages small and beginning farmers, concentration in agriculture has ironically occurred most and most rapidly in sectors not directly benefiting from the Farm Bill. For more than 98% of all farms and ranches, agriculture is still very much a family affair. On the impact on developing countries, independent analysis suggests little impact, pointing instead to internal political and economic conditions. Finally, on trade, the U.S. falls near the very bottom in the use of tariffs and in the bottom half in the use of domestic supports. The U.S. does not use sanitary regulations to lock out imports, nor monopolistic state trading enterprises to give our products the competitive edge. Even the Bush Administration, in its enthusiasm to reach a Doha Agreement, refused to do what Kind-Flake propose Congress now do: unilaterally disarm American farmers and ranchers. On the threshold questions that really matter, U.S. farm policy has worked. In the face of all the criticism, what it evidently lacks most is a publicist. Will we measure success by results or rhetoric?