Several Potential Changes for Farm Bill Via Conference

October 18, 2013 03:17 AM

via a special arrangement with Informa Economics, Inc.

Some big changes possible for farmer safety net provisions

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While the first official farm bill conference session will not take place until at least the week of Oct. 28, a lot of informal meetings are taking place among key staff and perhaps some lawmakers. The initial push is on getting a "framework agreement" between House Ag Chairman Frank Lucas (R-Okla.) and Senate Ag Chairwoman Debbie Stabenow (D-Mich.). Lucas will chair the conference panel.

A potential framework accord would deal largely with Title 1 (farm program safety net programs). Stabenow, sources say, is pushing for an "all-in" approach to safety net programs, which would allow farmers to qualify for both revenue (shallow loss) and price loss (target price) protection. That is already the case in the Senate farm bill, but that measure has a lot lower target (reference) price levels than the House farm bill and thus is not seen as a "true choice" for farmers with some 90 percent of funding for the revenue and only 10 percent for price loss via the Senate approach which clearly favors corn and soybean growers in the Midwest, namely the "I" states. If a way can be found to balance those programs, without impacting House target price levels too much, then the all-in concept could come into play. If not, then the House will push to save their more equitable farmer choice program. Even if an all-in approach is taken, farmers would be given the option to take the Supplemental Coverage Option (SCO) instead of the revenue loss coverage (called Ag Risk Coverage/shallow loss in the Senate farm bill).

Stabenow and her staff are also reportedly pushing for all payments to be made on base acres, but the House prefers planted up to base acres. A lobbyist for the soybean growers reportedly is pushing for base acres but an updated base, which would benefit soybean and corn growers because those crops have seen recent increases in planted acres. House conferees would not likely go along with that approach as it would not be equitable to crops other than soybeans and corn.

Acreage chaneges

Stabenow also wants a farm-calculated farmer safety net trigger option, reportedly at the "insistence" of Senate Finance Chairman Max Baucus (D-Mont.), who is not seeking reelection in 2014. While that is currently an option in the Senate farm bill, similar language is not in the House farm bill.

Another Stabenow goal in which she would modify her prior safety net positions to get, contacts advise, is to get mandatory money spent for energy-related programs in the farm bill. That is in the pending Senate farm bill but not in the House version.

As for dairy, odds are declining fast for any supply management language. In discussion, subject to several changes, is a program that would be a combination of a modified Milk Income Loss Contact (MILC) program at a certain dairy production level, and then a gross margin program after that – including a "feed adjuster" component dealing with corn feed prices. This program would garner the favor of important dairy-state Senator Patrick Leahy (D-Vt.), who reportedly has been working on language with Rep. Collin Peterson (D-Minn.), ranking member of the House Ag Committee.

A conservation compliance linkage with crop insurance cannot yet be ruled out, sources advise – despite opposition from House conferees. If a way can be found to deal with thorny issues relative to this topic, the language could still be included. An effort is underway to provide farmers who do not comply with conservation compliance a lengthy time to comply without penalty. And an effort is underway not to have crop insurance agents be the ones to verify such compliance.

The thorniest issue remains the level of food stamp (SNAP) funding cuts, but that will be decided by House and Senate leaders along with Obama administration officials, including USDA Secretary Tom Vilsack. Also being discussed, apparently with some assistance from USDA personnel, is whether or not language can be agreed to relative to an optional worker requirement for food stamp eligibility.

Comments: The big test for any major changes for Title I safety net programs is to look to see how it changes spending for the various program crops and how that compares to initial farm bill budget assumptions. If those calculations favor corn and soybeans versus cotton, rice and other commodities, it will be seen as the Senate farm bill is now – a measure lacking equity among other program crops at the benefit of corn and soybean growers, notably from the Midwest. Another key will be whether or not the likely favored choice by many producers will be negatively altered – that is, a combination of Price Loss Coverage and SCO. If so, then farmers liking that current choice say they would not favor any substantial changes in safety net programs via the farm bill conference.

There are four key variables in the safety-net discussions ahead: (1) Revenue Loss/ARC/Shallow loss provisions; (2) Price Loss Coverage/Adverse Market Payment; (3) Planted vs base acres in calculating payments; and (4) SCO provisions.


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






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