By: Chris Casteel
November 29, 2013
WASHINGTON — Rep. Frank Lucas, R-Cheyenne, is the chairman of the House Agriculture Committee and one of the most influential voices in Congress on farm policy.
The 53-year-old rancher has been in the House since 1994 and is the longest serving House member in the Oklahoma delegation. He has been trying for more than a year to get a new farm bill signed into law to set the rules for crop production and nutrition programs but has run into numerous obstacles, including House Republicans' insistence on major cuts to the food stamp program and differences with the Senate on support levels for commodities such as corn and wheat.
In an interview on Capitol Hill last week, Lucas talked about taxpayer support for farmers and other topics. Some of the answers were edited for brevity.
Q: Thanksgiving week is, of course, a big one for food purchases. Tell me how federal farm policy affects what people will buy for their big dinners.
A: (It ensures) that producers are able to raise that wheat that goes into dinner rolls, that they're still able to raise the corn and soybeans that feed out those wonderful turkeys we have or that nice ham or, if you're lucky, that slice of prime roast beef. All those things are there in an affordable, consistent, safe fashion because of the American farmer and that safety net that helps him and her when they deal with the banker, when they deal with the landlord, when they deal with the potential purchase of their products.
Q: Most people would probably agree that it's not desirable for farmers to experience catastrophic losses. But the question here is why the government should intervene if they do.
A: Well, you only have to look at the last century to see times when the federal government was not involved, when the policies weren't right. My grandparents were young men and women in the Depression. They had to deal in the southern plains in the middle of the United States with a horrendous drought. They got caught up in the collapse of the price of agricultural products, a collapse in the price of their land. Everything they defined as an asset overnight seemingly became worthless. Had they had crop insurance as we have now to address weather, it would have softened the blow.
My parents were young men and women in the 1950s. We didn't have the economic problems they had in the Depression in the 1930s. But in my part of Oklahoma, we went through a horrendous four-year drought, which — just like the '30s — drove more people off the land, reducing the number of producers. But ultimately we got through that weather pattern.
I came home from college in the early 1980s just in time to watch the worst economic meltdown in rural America since the Great Depression — another generation of people driven off the farm.
So you see, some would argue that the government shouldn't be involved in any way in helping provide a safety net for the production of food and fiber. Some would say government shouldn't be involved in anything. But the bottom line is this: You might not have to renew the subscription to your television cable, you might be able to not go to that football game or baseball game and be OK, you might even be able to darn your socks and put a patch on your sleeve … but we all have to eat.
And making sure that we have a sufficient supply of that domestically produced food and fiber — that's what these policies are all about.
Q: In the late '90s, this committee tried to move toward a more market-oriented philosophy called Freedom to Farm. What happened to that?
A: Well, it was surprisingly successful, but it took a lot longer than people expected. (Before 1996) your safety net was based on what you produced — you had to have a history in that particular crop. You couldn't switch crops. You couldn't do things differently. You had to keep raising that crop, raising it in the fashion you'd been raising it … to qualify for your loan, to qualify for your deficiency payment, all that sort of stuff.
The '96 law said, ‘Farm what you want to farm the way you want to farm it.' And to help you transition, we shifted from the old system over to the direct annual payments. About the same time, Congress joined the World Trade Organization, ratified the NAFTA treaty with Canada and Mexico and opened us up to the world markets. Lo and behold, I think optimistic people thought that access to those markets would be all that we'd ever need.
But alas they forgot about weather, they forgot about economic crises both at home and abroad, they forgot about all the things that still drive the cycles.
And the main focus nowadays is more crop insurance … it provides that basic safety net. And I would argue with a consistent supply of food and fiber — some might say a slight oversupply of food and fiber — the consumer eats cheap, eats well, eats consistently. If you want to put your dinner to the whim of the market, then I guess you'll take a chance.
As for me, I always want something on that shelf at the store when I go there.
Q: Without getting too deep into the weeds of federal dairy programs, does the government effectively set the price of milk?
A: The short answer is I think the policy is an effort to make sure that there's not a total collapse in the price of milk. Dairy goes back even before the 1933 act.
Originally, it was an effort to make sure there'd be enough fresh milk in all regions of the country. Now that's before modern shipping and the wondrous things like ultra-pasteurization we have now. But it is a controversial subject now. And it pits — using broad phrases — the littler dairymen perhaps in the Northeast against the mega-dairymen in the West and some in the Midwest. It is — at least in my experience — the toughest part of farm bill policy because everyone who has an interest has an absolute interest and virtually no one seems to have any flexibility.
Q: But what's the answer to the question? Do you think the government effectively sets the price of milk?
A: I don't think the government should, but I think the government has the responsibility to make sure that it's available. And avoiding wild swings in price helps to provide stability.
Q: Isn't that, then, the very definition of central planning?
A: Well, I would just say this: You have to assess the advantages that certain policies have to the country as a whole against the costs. If having enough to eat and having it be affordable is more of a cost than letting the market run its course, then I guess ultimately the consumer has to decide.
But right now they've been so spoiled by successful policies that date back literally to the 1930s, I'm not sure they'd be ready for a shock if they had to pay the part of their disposable income in this country that other countries do — that's sometimes two, three, four times as high. We spend a lot of money — that other people around this world spend on food — on a lot of fun things and a lot of consumer goods and a lot of lifestyle issues. I'd say the American farmer is actually subsidizing a good bit of the other economy.
Q: The rural-urban coalition that has been able to push farm bills through Congress in the past broke down this year over food stamp cuts. Is it beyond repair?
A: We'll see if it's really broken. I would just describe it in this fashion: Over time, the nutrition advocates have taken us to the point where approximately 80 percent of farm bill spending is on the nutrition programs, the feeding programs as some people call them in my town meetings.
And the other 20 percent goes to programs that ultimately raise the food. Is that the right balance? Well probably not. But the nutrition programs are generally set up so if you qualify — your income level, your asset level — you get the help. And maybe we need to work harder on growing the economy and expanding economic opportunity and giving people … a way to make their own living without the support of the so-called feeding programs.
That's where some of us disagree with the president. He's really focused on the feeding programs but maybe not quite as focused on programs that would end the need for the feeding programs.
Q: Your focus on food stamp reform has been on eligibility. Should Congress look at the types of food that can be purchased with food stamps?
A: It's an age-old debate. It goes back to many of my constituents who are now 50 years or older who remember the old commodity program days — when you got so much cheese, so much butter, so many beans, so much rice. Those products were there because the old programs used product purchases to maintain prices. We don't have warehouses full of real commodities any more. So that's really not an option.
The argument starting in the 1960s was that food stamps — as a paper item and now with electronic cards — were a simpler, more efficient way to deliver the services. I think you probably need to visit with a grocer about how he or she would deal with the kind of explicit requirements that some of my activist friends would state. It's kind of like the school lunch room and a lot of my colleagues' advocacy here that only certain things be allowed in the school lunch room. If the kids won't eat it, it doesn't do any good.
Q: And I suppose there's also the argument that in a lot of areas there's not the kind of food that's available in the suburbs or cities.
A: And you also have an education issue. When I was a kid, the home extension economist in my rural county and the extension club ladies — we're talking about the '60s now — they spent a lot of time educating people on how to preserve food, how to can food, how to plan your meals … I worry that a lot of our citizens up and down the streets, especially the ones who really need the food assistance, may not understand that you don't have to buy processed foods.
You can cook the beans, you can cook the rice, you can cook a green vegetable and have a balanced meal. And a whole lot cheaper. But how do you get people to the point where they understand how to boil the water? I fault some of my more liberal colleagues for not focusing on those issues but focusing on how many dollars we're transferring.
Q: I know this isn't your committee's jurisdiction, but what impact do you think ethanol requirements (through the Renewable Fuel Standard) have had on corn and livestock prices?
A: When you create a mandate that requires 15 billion gallons of a product and consumes about 40 percent of the corn crop, of course you're going to have an effect on the price of feed for livestock and humans.
If you send that kind of a market signal, and you drive up the price of a product through this government-generated demand, you cause producers to shift existing land into the commodity that has the government mandate.
So when all this extra production comes into being, and we go back to normal weather patterns, you're going to see a substantial increase in corn being produced — enough to meet the ethanol demand and animal demand and human demand. And what happens to the rest of it?
It overhangs the market and begins to drive the price down.
Throw in what (the Environmental Protection Agency) did last week and say instead of this year's mandate, we're going back to last year's mandate. So as supply is coming up because of the market signal, the EPA is turning down the demand for the product. Price pressure is coming to the grain markets in this ountry.
Q: So, huge impact?
A: Yes, because it doesn't take much on either supply or demand to drive prices through the ceiling or through the floorboards. And right now, after four years or five years of price pressure up, we're fixing to experience price pressure down. The (Renewable Fuel Standard) is the 20-ton gorilla of agriculture economics right now.
Q: Would you favor a full repeal of it?
A: I can't advocate the full repeal for two reasons. One, you've got to have ethanol to blend in the gasoline to oxygenate it, to make it burn cleaner. There's a legitimate demand there, absolutely. Two, corn is the basic commodity in this country. You can drink it, you can eat it, you can feed it, you can burn it — you can do amazing things with corn.
It's a wonderful product. But it has a price effect on all other grain commodities and if they start down, what's it do to wheat, barley, oats — what's it do to the rest of us?
Q: And to come full circle, (price collapses) would mean more government money going to farmers?
A: Because we sent the wrong signals on production. And that wasn't in the farm bill. (The Renewable Fuel Standard), as you know, is not in the Ag Committee's jurisdiction.
Q: Through all of these (farm bill) controversies this year and last, everyone in both parties is still complimentary of you and don't blame you. How have you been able to maintain the respect among the Democratic members and the Republicans on the committee?
A: My father explained to me when he started his (lumber) business — and mortgaged everything he had in the world — he said we only have so many customers, we can't afford to lose any customers because we can't replace a customer we lose.
Now that's how I've conducted my political life, the way I've tried to conduct my relationships with my neighbors back home, that's the way I've tried to work with my colleagues up here.
I've been honest, I've been straightforward with them, I've tried to work with them, I've treated them like I would want every one of them to be my neighbor and speak to me for the rest of my life. And it's been difficult in this environment.
I will tell them exactly what the policy circumstances are and what the political implications are when they ask me.
As I told one of my colleagues, I may give you crap but I won't tell you crap.
And in a place like this, where everyone is trying to manipulate the circumstances, people respond.