P24—Lancaster Farming, Saturday, May 5,1984 Will stability be goal of new farm bill? NEWARK, Del. Congress will draft a new Food and Agriculture Act in 1985 to replace the 1981 version. Given the complexity of today’s farm issues and the seemingly endless range of policy choices, what is this legislation likely to look like? Is any sense of direction emerging from current discussions of farming’s many problems? “Yes,” says University of Delaware extension economist Gerald F, Vaughn, “if areas of substantial agreement can provide direction. There’s more agreement today among farm policy ob servers than might be expected.” In particular, observers are concerned about American agriculture’s heavy dependence on volatile foreign trade, wide annual fluctuations in farm production, dim outlook for commodity price improvement (at least in the short run), and the trend toward fewer and larger farms. Based on these common con cerns, Vaughn feels drafters of the 1985 farm bill are likely to push toward a goal of greater stability, rather than increased returns to farmers. NEED ROOFING & SIDING? “The Ultimate Meaaure of a Cooler's Worth Is its Performance!” and when you put your milk in a Mueller HlPerForm ...its I The HiPerForm 3 Electronic Refnger ' ation Washing System has a new look and new features' Alarm Circuit j Pre start Control Manual Bypass * Digital Display Automatic interval Agitator Agitate Time Switch Digital Temperature Readings ★ WE HAVE USED TANKS 300 GALLONS AND UP MARTIN’S REFRIGERATION SERVICE rffk Milk IS the real thing! “U.S. agriculture operates within a changing economic framework,” the economist says. “Once again it’s going through a highly unstable period, made more so by greater dependence on foreign trade. There are probably no free trade countries today, since much of the trade is managed by governments. Foreign trade is volatile and influenced by many factors, including production and consumption in other countries, export competition, exchange rates, inflation, interest rates and domestic agricultural policies. These factors are often outside U.S. control, making our agriculture highly vulnerable to the extent that it depends on foreign trade.” Moreover, nearly half the U.S. increase in exports in the late 1970 s was to developing countries. “As these countries became over whelmed with debt, they had to stop buying from us,” Vaughn says. The recent sharp decline in American agricultural exports is directly related to loss of these markets. 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Cash flow problems " These factors foster agricultural instability,” the specialist says. “Some segments of the farm economy, such as livestock producers, aren’t protected by government programs and may suffer the most severe consequences of in stability.” Prospects aren’t bright, either, for significant near-future price improvements for farm com modities. Total demand ap parently won’t rise more than production, Vaughn says. There are surpluses, and the export market won’t take up the slack. Under the circumstances, many farmers are experiencing cash flow problems they are debt Generator Sets Vy Manufactured for Agriculture POWER •Air cooled Units: 2 - 20 KW Maxi-Power Generator has over 325 automatic units in South Eastern Pa. Why not check with the leader before buying! 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This leaves a relatively few farms that produce a large percentage of U.S. output and receive the major benefits from farm programs, while a much larger number of farmers produce a small per centage and depend on off-farm income. “Federal tax policies seem to disadvantage modest-sized family farms most severely,” Vaughn says. “These policies have been criticized for favoring larger farmers and wealthy investors.” Given these conditions, he feels only four basic options exist for U.S. farm programs today. The choices are: (1) to have no program; (2) to have voluntary programs; (3) to have voluntary programs with income sup- Automatic Transfer Switch plements to medium-sized and smaller farmers; or (4) to manage commodity supplies. Vaughn says these alternatives would probably affect farmers as follows: v No program Option one: no program - The chief result of this would likely be further decline in farm prices and more farmers going out of business. An eventual equilibrium would be reached, but without price stabilization pleasures farming could be even less stable than it is today. Voluntary programs Option two: voluntary programs - These would protect against the lowest prices but would not assure anything better. Such programs are viewed as costly and inef fective. They suffer from the free rider who doesn’t participate in the production adjustment part of the program but benefits from any price improvement. “Voluntary programs achieve little production adjustment unless made attractive by high (and costly) diversion payments to farmers,” Vaughn says. Income supplements Option three: voluntary (Turn to PageD2s) •Water Cooled Units: 7.5 -1000 KW. imatic isfer id State >ntrol ogic
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