Georgia farmers have a federal program again. But what does
it mean?

Congress passed the Federal Agricultural Improvement and
Reform Act March 28. The
seven-year farm bill is a new deal for agriculture. It promises
to bring an end to farm
subsidies as the country has known them since the Great
Depression.

That’s good news for taxpayers.

In the end, it’s good news for growers, too, said George
Shumaker, an economist with
the University of Georgia Extension Service.

"It’s clearly good news for agriculture," Shumaker
said. "It allows
farmers the freedom to adjust their operations to take advantage
of the most profitable
crop opportunities."

Shumaker and other Extension economists will conduct four
seminars on the new farm
bill. The sessions are planned for 1:30 to 4:30 p.m. in
Statesboro April 30, Tifton May 1,
Macon May 7 and Calhoun May 8.

The new farm bill differs from those of the past, he said, in
two major ways.

First, the FAIR Act ends the connection between market prices
and payments to farmers.

"In the past, when market prices were high, subsidies
were low, and vice
versa," Shumaker said. "Under the FAIR Act, subsidies
to eligible producers are
predetermined regardless of market price."

Second, the new bill lifts the limits on what farmers
plant.

"In the past, farmers had to restrict their plantings to
be eligible for
subsidies," Shumaker said. "The FAIR Act puts no
restrictions on what or how
much can be planted. Subsidies are not tied to what the farmer
grows."

In the new bill, farmers who had crops in federal wheat, feed
grain or cotton programs
in any of the past five years can get market transition
contracts.

Sign-ups will begin around mid-May. The deadline will be Aug.
1. Growers will get half
of the yearly payment within 30 days of signing up. The rest
will be due by Sept. 30.

For program crops, farmers will be able to get nonrecourse
marketing loans as they have
in the past, Shumaker said. But the top loan rates are set at
low levels: $51.92 per
hundred pounds for cotton, $2.58 a bushel for wheat, $1.89 a
bushel for corn and $5.26 a
bushel for soybeans.

The secretary of agriculture can reduce loan rates. But the
rates can’t be set at less
than 50 cents for cotton or $4.92 for soybeans.

A minor change is that the FAIR Act covers seven years. Past
farm bills have spanned
five years.

The bill’s best point, Shumaker said, will be its overall
effect.

"The environment this bill will create will allow
innovative and well-managed
farms to prosper and grow faster than they could before,"
he said.

Farmers will be able to adjust what they plant to match
rising market prices, he said.
But it will make their marketing skills critical.

"The people who will prosper will be those who have
mastered skills of managing
market risks," he said.

For Georgia peanut growers, the peanut program survived with
two major changes. One,
the support rate for quota peanuts will be dropped from $678 a
ton to $610. Two, the total
national quota (and, as a result, each grower’s quota) will drop
by 10 percent to 12
percent.

On the plus side, peanut growers will be able to transfer
quota across county lines.
That could enable them to recoup some of their losses from the
drop in quota and quota
prices.

For dairies, the FAIR Act ends the assessment on dairy
products. It drops the support
price from $10.35 per hundred pounds in ’96 to $9.50 in ’99.
After that, a loan program
will replace dairy subsidies.

The new bill allows the secretary of agriculture to start new
Conservation Reserve
Program contracts and extend old ones. It limits the program to
36.4 million acres.