The Latest Turns in the Path to a New Farm Bill

June 25, 2010 11:11 AM

Farm and commodity organizations got a chance to air their views this week on the 2012 Farm Bill, or least what most hope will be the 2012 Farm Bill.

The House Ag Subcommittee on General Farm Commodities and Risk Management opened their portion of the farm bill process with a hearing featuring the American Farm Bureau Federation (AFBF), National Farmers Union (NFU), National Corn Growers Association (NCGA), National Association of Wheat Growers (NAWG), American Soybean Association (ASA), National Cotton Council (NCC) and more.

Reviewing their testimony revealed some not-too-surprising trends.

The 2008 Farm Bill is well liked. For the most part, the farm and commodity organizations gave their support for the last omnibus farm bill which continued many of the programs and policies that farmers have become familiar with. And those "new" programs introduced into the mix are also liked by the groups, some suggest some changes that they think need to take place.

Well liked, that is, except for NFU handing out criticism that the 2008 law failed to support "family farmers." That term has long been bandied about in farm policy debates, with seemingly as many definitions of a "family farm" as there are with the term "sustainable agriculture." But that's a debate that will take place further down the farm bill road.

ACRE, SURE and crop insurance. Those are three "popular" programs, with the Average Crop Revenue Election (ACRE) program and Supplemental Revenue Assistance Payment (SURE) introduced with the 2008 Farm Bill. But while those programs represented a much-sought-after component to U.S. farm policy, like any new policy, there are those seeking changes, including NCGA, ASA, NAWG and more.

Much like the views of House Ag Committee Chairman Collin Peterson (D-Minn.), many would like to see the state-level trigger under ACRE move to something closer to the farm -- the county level. But with that comes increased cost and potentially more complexity. The latter is another factor that many expressed concern about ACRE moving forward as well.

On SURE, the delay in payouts under the program -- losses suffered from 2008 losses didn't start to be paid until this year and 2009 losses won't be heading to affected farmers until 2011 -- and factors on the loss requirements are ones where commodity groups also want to see changes.

And the proposed shifts to crop insurance by the Obama administration have been met with concern by many of the farm and commodity groups testifying. Many view crop insurance as one of the key programs in U.S> farm policy.

Another common theme with these three programs: avoid overlaps in coverage.

Direct payments. These have been a feature of U.S. farm programs for some time and are WTO "legal" as they are not tied to current prices or production and thus are viewed as not distorting trade. NAWG called for these to remain as they are one of the few payments wheat producers (and their lenders) can "count" on. But NFU said those should be scrapped and dollars put toward other programs like ACRE, SURE, counter-cyclical payments and more.

And with the kind of budget pressures that likely will face lawmakers as the write the bill, the direct payments could well be a vulnerable as lawmakers seek dollars for other legislative efforts. Even Rep. Peterson has raised that possibility. But as evidenced by NAWG's stance vs. NFU, this subject will pit farm interest against farm interest -- not a positive when agriculture is trying to "come together" around a new farm bill.

The budget: That is going to be one of the biggest issues for the next version of U.S. farm legislation. The rising federal budget deficit will have to be addressed and that day of reckoning could come at just the "wrong" time for writing that next farm bill. But that factor was largely ignored by many -- but not all as AFBF cautioned the programs have to be crafted responsibly relative to the budget. But even then, AFBF and others didn't suggest specifically how to achieve such a goal. But ASA made a call for something that those like Rep. Peterson say also won't fly in the budget climate -- higher loan rates and target prices.

And then there is supply management. NFU made their plea for a return to a version of the farmer-owned reserve where supplies would be held off the market and could be released into the market when certain stocks:use levels are achieved and at "a value reasonably greater than current market price." But cost was among one of the factors that ended such a reserve in the past and the budget pressures facing the country now would seem to make resurrecting such a program a tall order.

Will these groups get all they want? No. But that's how omnibus legislation like this unfolds. It's a negotiation of sorts.You don't start with your ending goal -- you start with something higher so that when the final version comes out and it falls short of those initial wants, groups can at least claim they tried to get all they can.

But the testimony of these groups is just one of the steps in a farm bill process that will take quite a while to unfold. And it is one that will see other influences such as the budget have probably more of a say in the eventual policy that emerges rather than these initial wish lists from the major farm and commodity organizations.


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