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Terrorist Attack: Could it Affect US Agriculture?

Experts are warning that last week's terrorist attacks on the United States could adversely affect American agriculture, if the U.S. economy slows further and if Congress votes to shift money from farm programs to national security. Well before the September 11 terrorist attacks on New York and Washington, the American farm economy had been losing steam, a victim of too many stored crops, low commodity prices, and sluggish exports.

Things were bad enough that Congress voted recently to shore up farmers' incomes with a nearly $6 billion emergency aid package. Even so, Philip Paarlberg, a professor of agricultural economics at Purdue University in Indiana, believes the financial shockwaves caused by the terror attacks could bring another round of money woes to American farmers. "Anything that affects the U.S. economy negatively, or the global economy negatively, is going to be a hurtful factor for the [agriculture] sector," says Mr. Paarlberg. "If we go into recession, East Asian countries don't export as much to us, their incomes go down and [they don't buy our food exports, so] you get this cycle. And that's been going on anyway, but this is just another factor in that."

Another concern, says Mr. Paarlberg, is that any American military action against terrorist groups or their government sponsors might also involve U.S. trade sanctions, possibly including embargoes on agricultural products. Mr. Paarlberg says that without strong international support for such embargoes, export-dependent American farmers could pay a disproportionately heavy cost. "Basically, when you have half your wheat going overseas, and fifty percent of your maize and something like twenty-five percent of your soybeans, you begin to get a little worried about that," says Mr. Paarlberg

American farmers will also have to wait longer now for Congress to act on legislation that could offer better price and income protections than current law. The House of Representatives has drafted a 10 year, $75 billion farm bill to provide those subsidies, and House leaders had hoped to begin debate on the measure by mid-September. The Senate has yet to draft its version of a new farm bill.

Mary Kay Thatcher, Washington director of the five million member American Farm Bureau Federation, says that in the wake of the September 11 terrorist attacks, all planned legislation is on hold. "Certainly the Congress is dealing with only one issue, that's the tragedy, trying to make sure that the money is there for defense," says Ms. Thatcher. "There to help folks from the Pentagon and New York City, and rightly so. That's exactly where they ought to be focused."

But Ms. Thatcher believes many lawmakers might now be more keenly aware of the national security aspects of the nation's food supply. "All year we have tried to remind people that food is a national security issue, just the same as energy costs are. But I think when these kinds of things happen, then maybe people do realize that they want the United States to be as self-sufficient as possible, and that our farmers are having trouble competing against farmers from other countries with all the government help they've gotten," says Ms. Thatcher. "So, it may actually make the job easier, convincing an urban member [of Congress] from Detroit or Chicago that indeed, agriculture is a national security issue." Ms. Thatcher says she is hopeful that Congress will soon be able to turn its attentions back to the farm bill and find the money to address agriculture's financial problems. In the meantime, American crop farmers just getting to work on this year's likely bumper harvest are keeping an especially watchful eye on the markets and the evening news.