You Make the Call: To Subsidize or Not? U.S. Farm Policy: 2007 Farm Bill Debate Dr. Mark A. Edelman, Director Community Vitality Center Professor of Economics and Extension Economist Iowa State University Leadership Iowa Farm Bill Panel December 6, 2007 December 6, 2007

How Public Policy Problems are Different  Key Differences: Group Rather than Individual Decisions Group Rather than Individual Decisions People Have Different Circumstances People Have Different Circumstances People Hold Different Values on What Should Be People Hold Different Values on What Should Be People Differ in Goals and Objectives People Differ in Goals and Objectives  Conflicting Views on What Ought to be Done

Advocate vs Educator  An Advocate believes they have the best solution to a problem, tries to convince others, and encourages others to support their cause in the political process.  An Educator enhances learning and understanding, assists others in making their own decisions, and facilitates participation in the process

Science Can’t Always Solve Problems  Science solves problems when Single objective and relatively few goals Single objective and relatively few goals Objective is clearly revealed and measurable Objective is clearly revealed and measurable Everyone in group agrees with objective & goals Everyone in group agrees with objective & goals  Public Policy Issues have Multiple objectives and goals Multiple objectives and goals Objectives that are unknown or not revealed Objectives that are unknown or not revealed Differing value judgments on what should be done Differing value judgments on what should be done  Science is only a decision tool

Role of Public Policy Educators in a Democracy Present Facts Present Facts (evidence of what exists) Destroy Myths Destroy Myths (incorrect notions that people believe are facts) Allow citizens & leaders to apply their own values Allow citizens & leaders to apply their own values Facilitate understanding of areas of agreement & differences Facilitate understanding of areas of agreement & differences Facilitate participation in process Facilitate participation in process

Edelman’s Top Farm Bills are temporary extensions of 1940s era permanent farm law 2. Farm Bills are the way they are because they are written by the Ag Committees

Who Sits on the Ag Committees? Senate Members - 21 North Central - 11  IA, ND, MI, NE, OH, MN  IN, KS, MN, SD, IA South - 5  AR, GA, MS, KY, SC Northeast - 2  VT, PA West - 3  MT,CO, ID House Members - 46 North Central - 18  MN, IA, SD, IN, KS, OH, MN, WI, ND, IN  KS, IL, MO, IA, NE, OH, NE, MI South - 19  NC, NC, GA, GA, TX, TN, GA, TX, FL  VA, AL, OK, NC, AL, AL, TX, LA, NC, TX Northeast - 3  PA, NY, NY West - 6  CA, CA, CA, CO  CO, CA

Edelman’s Top The Farm Bill coalition has changed over time:  Farm Bloc in 1930s  Food programs added in 60s  Environment & Rural Development in 70s 4. About 75% of Farm Bill spending is food programs

Edelman’s Top 10 5.Farm Bill spending has increased as farm numbers have declined.  Some suggest less farmers less clout  Others: fewer farmers easier to organize 6.Market oriented system with a safety net and increasing incentives for multifunctional objectives  Environment & water quality  Renewable Energy

Edelman’s Top U.S. Food & Ag System is one of few remaining industries where dispersed family operations sell into a much more concentrated processing and distribution system that also relies on international markets where significant protectionism has existed since prior to WWII. 8. Iowa relies more on Ag’s contribution to the state’s economy than almost all other states except perhaps the Dakotas  25% of Iowa GDP

Edelman’s Top U.S. Farm Safety Net provides $2 billion injection into Iowa’s economy when times are bad.  No other state benefits more: 4-5% of GDP  So question is What to do with Budget Baseline if it does not go to Farm Supports?  If $2 doesn’t come to Iowa, where will it go?  Do we elect Iowa Delegation to keep score? 10. Maybe the Iowa debate is not whether or not there ought to be farm subsidies, but what form should the safety net be to achieve multiple farm and nonfarm objectives.  Start with Farmer Preferences

Knowing Farm Bill Processes  Troika (3 horse hitch) Interest Groups (Ag, Environment, Food, & Rural Dev) Interest Groups (Ag, Environment, Food, & Rural Dev) Executive Agencies Executive Agencies Congressional Committees Congressional Committees  Legislative Process Leadership Control (Majority Rules) Leadership Control (Majority Rules) Content Control (Authorization and Oversight) Content Control (Authorization and Oversight) Budget Control (Appropriations) Budget Control (Appropriations)  Best Practices for Communication & Building Relationships

The Farm Bill Legislative Process  Administration Hearings and Proposals  Ag & Ag Approps Committee Assignments (Leadership)  Budget Targets and Appropriations (Budget)  House & Senate Ag Committees (Authorization) Subcommittee Hearings & Proposals Subcommittee Hearings & Proposals Markup to Committee Proposal Markup to Committee Proposal Floor Debate Floor Debate Passage by Both Houses Passage by Both Houses  Conference Committee to Iron out Differences Concurrence by Both Houses Concurrence by Both Houses  Presidential Signature or Veto

Funds Available Senate Target:  Tax Revenues for increasing targets Baseline  Revenue Insurance Pilot versus Disaster Assistance  Number of Amendments House Target:  $15 billion over 5 years above Baseline

2007 Farm Bill Issues and Resources  Iowa Farmer Preferences on 2007 Farm Bill Issues (PDF file) Iowa Farmer Preferences on 2007 Farm Bill Issues Iowa Farmer Preferences on 2007 Farm Bill Issues  The 2007 Farm Bill: U.S. Producer Preferences, 2006 The 2007 Farm Bill: U.S. Producer Preferences, 2006 The 2007 Farm Bill: U.S. Producer Preferences, 2006  USDA 2007 Farm Bill Page USDA 2007 Farm Bill Page USDA 2007 Farm Bill Page  Senate Committee on Agriculture, Nutrition and Forestry Senate Committee on Agriculture, Nutrition and Forestry Senate Committee on Agriculture, Nutrition and Forestry  House Agriculture Committee House Agriculture Committee House Agriculture Committee Policy Centers specializing in Farm Bill Issues Analysis  CARD (Iowa State University) CARD (Iowa State University) CARD (Iowa State University)  Agriculture and Food Policy Center (Texas A&M) Agriculture and Food Policy Center (Texas A&M) Agriculture and Food Policy Center (Texas A&M)  Agricultural Policy Analysis Center (University of Tennessee) Agricultural Policy Analysis Center (University of Tennessee) Agricultural Policy Analysis Center (University of Tennessee)  Food and Agricultural Policy Research Institute (Missouri) Food and Agricultural Policy Research Institute (Missouri) Food and Agricultural Policy Research Institute (Missouri)  Rural Policy Research Institute (Missouri) Rural Policy Research Institute (Missouri) Rural Policy Research Institute (Missouri)  Farm Foundation (Chicago) Farm Foundation (Chicago) Farm Foundation (Chicago) Extension Public Policy Education Principles  Public Policy Education by Richard Barrows (PDF file) Public Policy Education by Richard Barrows Public Policy Education by Richard Barrows CVC Web Site: