Washington, DC

The 1996 Farm Bill substantially changed the economic environment for decisionmaking in agriculture--for all sizes of farms. Deficiency payments, which provided income support (more when prices were low, less when prices were high) are no more. In their place, we now have "transition" or production flexibility payments, contracted for in a generally known amount from now through 2002.

Price support loans now provide less of a price floor, since they are generally "capped" at the 1995 levels. There are a number of new or, substantially modified conservation programs, including the Environmental Quality Incentives Program (EQIP) which provides $200 million annually for educational, technical, and cost-sharing assistance for environmental quality improvement practices.

Any new Farm Bill offers two primary challenges for the land-grant system. The first is an immediate one of educating about the bill to help farmers and landowners understand program provisions and to assist them in choosing their most profitable level of participation. For the 1996 bill, the "commodity program" choice was clear, and our challenge was to help farmers learn about the production flexibility program so they could sign up during the one-time sign-up period. In addition to our "regular" educational programs, we participated in with the Farm Service Agency, and the Federation of Southern Cooperatives in a concerted effort to inform small farmers in the Southern states.

Our second, longer-run challenge is to conduct research and education programs to better prepare farmers to manage the increased risk of operating in a more volatile, market-oriented enviro-nment. We are well-positioned to meet this challenge. Risk management research and education for farmers is a major component of the national system initiative "Managing Change in Agriculture." This initiative seeks to incorporate comprehensive risk manage-ment into the broader context of how farm families establish personal and family goals and evaluate alternative means of striving to reach those goals.

Effective research and extension programs for small farmers must frequently be tailored to meet the particular needs and circumstances of this group of operators. Often, this involves more labor-intensive efforts, especially in the case of education delivery programs.

In these times of flat or declining resources, many in the land-grant system say we cannot afford these special efforts.

Yet, to fail to address the special needs of small and moderate-size farmers is to betray the very basis of the land-grant system, which was founded to serve people, not production. For Extension, 65 percent of all Federal funds and 100 percent of all 1890 Federal funds are distributed by a formula based on each state's share of the rural, as well as farm, population.

For research, 30 percent of all Federal (USDA) dollars and 100 percent of 1890 Federal (Evans-Allen) funds are distributed by a similar formula.