10/22/08 Ag Industry Facing Challenges

Ag Industry Facing Challenges. I'm Greg Martin with today's Line On Agriculture. Despite the economic turmoil in the nation - and around the globe - many have said the agriculture sector has remained strong. National Farmers Union President Tom Buis is one of those people - but he's also cautioned a global financial crisis can impact agriculture. He notes the industry is already facing challenges. BIUS: Input costs are still high, in some cases still rising and commodity prices are going the opposite direction enough so that many farmers are calling us and telling us that they will not be able to produce at the cost of production for next year. Combine that with what's happening in the overall economy - the potential for more expensive or tightening of credit filtering down to rural areas - a worldwide recession that could reduce demand for food products - and Buis says you're left with a lot of uncertainty. And while the farm bill does have a safety net - Buis doesn't believe it's adequate. BIUS: We tried to say that early on in the farm bill process but I think it's always difficult to write a farm bill in high commodity price times. People look short term rather than long term. We hope that his is just a small hiccup and it comes back but market highs tend to last a lot shorter than market lows and gravity works in markets. Unfortunately - farm program spending is often a target in tough times. And with the perception agriculture is doing well - Buis says that could definitely hold true in the current economic situation. He says opening the farm bill to the disadvantage of America's farmers is the wrong move - but he is concerned. BIUS: When they start looking to trim the deficit agriculture gets looked at quite closely and if you've paid attention to the Presidential debates there's one candidate out there that every time he's asked for specifics on how he's going to cut the budget, it's totally agriculture. Buis says the Market Access Program - sugar program - and ethanol subsidies have all been mentioned. But he ultimately believes direct payments would be the biggest target. He says Congress had an opportunity to convert the payments into a better countercyclical safety net and didn't take it. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.