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Sen. Roberts: Now Farm Bill Needs to be Done with Hearings and Analysis

December 1, 2011
By: Jim Wiesemeyer, Pro Farmer Washington Consultant
Untitled Document

via a special arrangement with Informa Economics, Inc.

Key lawmaker still waiting to see language of what emerged from effort to develop bill for debt plan


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


Now that the farm bill effort that was linked to the Super Committee has ended without success, the Ranking Member of the Senate Agriculture Committee says there is time for hearings and analysis to be done by the Senate Ag Committee and others to develop the next farm bill in an open process.

“Now there should be study and analysis,” Sen. Pat Roberts (R-Kan.) told Informa. “Put that in capital letters and in 20-point type,” he added, referring to his start as a journalist. The analysis, Roberts said, should include “a look at the equity of cuts” between various farm bill titles. Roberts will open the Farm Journal Forum as the “morning newsmaker” on December 6 at 7:30 am in Washington, DC. Link.

The Super Committee-farm bill linkage was one which saw the Chairs of the House and Senate Ag Committee work on the final package without the help and aid or input of the two ranking members of the panel – Roberts and Rep. Collin Peterson (D-Minn.), both of whom chaired the House Ag Committee during successful farm bill efforts.

In the wake of the end of the Super Committee effort, Roberts called for an explanation of what was agreed to and impacts of the effort, an explanation he said to date has not come forth. “I’m not sure I’ve gotten an official response,” Roberts said. “A lot of farm and commodity organizations share my concerns with the direction that this has taken.” Labeling the effort as being “unique and unprecedented,” Roberts said “What we went through – or I didn’t go through – was different.”

While stating he can understand why the chairs of the two panels worked on their own to fashion a plan, Roberts said, “A lot of members said they felt they didn’t have access. So the key is where we go from here.”

From Roberts’ perspective, that next step is to “get the process right and handle this in a regular fashion. That will let members fell like they have full access to assess this – not just from the perspective of individual states and commodities, but also in regard to long-term policy and where we ought to be headed and where we are headed – like it or not.”

When asked about specifics in the apparent package that was worked out between House Ag Committee Chairman Frank Lucas (R-Okla.) and Senate Ag Committee Chair Debbie Stabenow (D-Mich.), Roberts signaled that still is a sore spot as he has yet to see any such language. “There were good things that I thought were in there on crop insurance,” he said. “That’s the number-one issue for farmers – that’s what they wanted – for the program to be, first, preserved, and then strengthened.” He also noted the crop insurance program has been reduced by some $14 billion via the past two farm bills.

“The commodity title has also raised some questions and deservedly so as it becomes more evident what apparently was in there,” Roberts continued.

The apparent plan featured higher to significantly higher target prices for some crops, a situation which Roberts said was a major concern point for him. “I have real concerns about going back to 1985 farm program policy where farmers will farm the program.” Should prices fall below those apparent lofty target prices, he expressed concern about government outlays that could develop. “Second, that raises the specter of a WTO complaint really fast as it signals we have not decoupled payments which we did in 1996. That’s the opposite of what we want to achieve.”

The aborted farm bill plan, sources said, would have based Ag Risk Coverage payments on 60 percent of planted acres versus a higher 85 percent figure for any target price payments, again on planted acres. Roberts said “that is a good area for analysis” as to its impacts.

Despite lacking apparent details, Roberts said his understanding of what was formulated is that cotton removed themselves from the commodity title by axing their target price in favor of a revenue-based program that falls under crop insurance. “I have to give cotton credit for a new and innovative idea. They put themselves in a different title of the farm bill and that sets the tone for fresh thinking to say the least.”

Roberts agreed with prior reports which indicated that under the proposed cotton safety net program (STAX), there would be no payment caps because that would be considered an insurance program.

As for the Super Committee failing, Roberts added his voice to those that weren’t surprised. He noted that two members from the Democratic side were chairs of the campaign committees, “and they are already running ads against Republican lawmakers to not cut Medicare. So that was off the table.”

Roberts also said the situation has now boiled down to Congress and the administration punting on first, second and third down in efforts to deal with U.S. debt.

Another area Roberts has focused attention on is the MF Global bankruptcy. “Basically the house is on fire and we have to save the women and children and the farmers and ranchers in the barn. The letters I’ve gotten on this are heartbreaking.” But despite how gut-wrenching those letters are from constituents, Roberts stressed, “If the theory is correct that MF Global mixed customer money with company funds and made investments, that’s against the law. I hope people don’t try to make this into a situation where we need new regulations. This may have been a case of breaking existing law.”


Comments: As usual, Roberts keyed in on the most important elements of farm policy: equity, hearings, analysis, and the goal for any bill now to be budget responsible.

I still cannot understand why the two Ag panel leaders have not given the Ranking Members the last draft of the aborted farm bill, and the Congressional Budget Office (CBO) analysis. But very few things make sense to me in this Congress -- from both political parties. And the White House. And USDA. Etc.

Regarding target prices, and those proposed in the aborted farm bill, I will have a lot more to say in the coming weeks and months. Some questions: What information was used to determine the increased target levels? If cost of production was used to set target price levels, whose cost of production? Would they serve as a magnet for plantings? How would any increases affect U.S. World Trade Organization commitments? Why was sorghum's target price reportedly set around 20 cents higher than corn in the failed farm bill package? Why did corn and soybeans get a higher percentage target price increase than rice?

Targeted comments from some on target price increases vs ARC (Ag Risk Coverage). Some observers tell me that if some groups and others contend that increased target prices that are raised to a level where they are still not expected to (based on Congressional Budget Office estimates) influence planting decisions, if the program pays on planted acres, then, they ask, what would be the impact of a revenue guarantee program paid on planted acres that is the product of record high prices times some lofty yields and near or record high plantings? Those observers conclude that the end result would be a record high revenue guarantee. What this debate, and it is a good one, tells me is there is a need for a side-by-side analysis relative to influence on planting decisions that could demonstrate that the shoes of groups who like revenue but cry foul over target prices may be squeezing their own feet. Some say the solution may be to pay on some sort of base for both to get out from under any claim that plantings would be influenced.

I wonder if USDA Secretary Tom Vilsack will get into the farm bill process by instructing his many capable USDA analysts to look into this and other key farm bill issue -- publicly. USDA has reportedly worked closely with the Ag panel leaders in their secret farm bill process. Let's bring USDA's analysis into the open. Let's have USDA and the U.S. Trade Representative's Office weigh in on any WTO-related concerns of farm bill proposals. Better to do that now rather than to lose another WTO trade action complaint against U.S. policy.



NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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