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Published May 24, 2010, 12:07 PM

Farm bill hearing tour makes its stop in SD

SIOUX FALLS, S.D. — Rep. Collin Peterson, D-Minn., chairman of the House Agriculture Committee, and colleague Rep., Stephanie Herseth Sandlin, D-S.D., brought home issues of ethanol and risk management policy in 2012 farm bill hearings May 18 in Sioux Falls, S.D.

By: Mikkel Pates, Agweek

SIOUX FALLS, S.D. — Rep. Collin Peterson, D-Minn., chairman of the House Agriculture Committee, and colleague Rep., Stephanie Herseth Sandlin, D-S.D., brought home issues of ethanol and risk management policy in 2012 farm bill hearings May 18 in Sioux Falls, S.D.

A dozen House committee members attended a hearing at Augustana College. The hearing lasted two hours and 45 minutes and drew some 175 people, including panels of corn, soy and wheat producers, general farm organizations and agri-energy heavy hitters. The hearing did not include sugar or oilseed topics.

Herseth Sandlin, who was elected in a special election in 2004, is the ninth-ranking Democrat on the House Agriculture Committee. She is in a relatively tight race with Republican challengers who are vying for the nomination in the June 8 primary.

Committee hearings on the next farm bill so far have been held in Iowa, Idaho, California, Wyoming, Georgia, Alabama and Texas. A hearing is scheduled in North Carolina in June, but Peterson says he’ll hold off after that until after elections.

The series involves packing up nine committee staffers on a government plane and moving them among the locations, where various members sit in. For the first time, the committee offered live Internet streaming of the event.

Peterson says the current farm program seems relatively popular, but he wants to make sure the programs work

together.

“My personal opinion is that we’ve kind of added (programs) on top of programs, and I don’t think they work as well as they could or should,” he says.

Some of the important discussions involved whether and how to tweak programs enacted in the 2008 farm bill.

‘ACRE’ shifting?

Gary Duffy, a diversified crop and livestock producer from Oldham, S.D., president of the South Dakota Corn Growers Association, described crop insurance as “the greatest risk management tool producers have,” and especially revenue-based programs.

He says the Average Crop Revenue Election program provides help while cutting direct payments and lowering loan deficiency payments.

Duffy says ACRE is relatively complex, however, and poses “real challenges” for farmers to decide whether to enroll. He also says the program should be county- or even farm-based, citing the dramatic difference in rainfall between places even within Kingsbury County, S.D.

Peterson says only 10 percent of North Dakota’s farmers participated in ACRE, while in South Dakota, only 18 percent had. He implied that he is looking at potential changes, but also that changes would depend on costs, yet to be scored by the Congressional Budget Office.

Peterson says he has one county in his district — Minnesota’s Stevens County — where 80 percent of the eligible acres were covered by ACRE. He says he thinks time might help boost participation elsewhere as people “see what happens.”

Matthew Wolle, a young farmer from Watonwan County in south-central Minnesota, suggested a “sub-state” trigger for the program, which currently is an average of an entire state’s conditions. Peterson says he questions the workability of the state-based trigger, but also the fundability of the county-based triggers.

Herseth Sandlin says she hasn’t decided whether or how to change ACRE, but that “we need to learn why” the participation levels are low in North Dakota and South Dakota. She also says it is important to know how the program has offset reductions in other conventional farm programs and how it can be adjusted to fit producers of other crops in the Southeast states.

Crop insurance alone?

Rep. Mike Rogers, R-Ala., asked the producer panel whether Congress could get farmers to opt out of existing farm support programs if crop insurance programs were significantly improved.

“Silence,” Rogers said, smiling, after several seconds of pause.

Finally, Kevin Scott of Valley Springs, S.D., chairman of the South Dakota Soybean Association, spoke up, saying he’d have to consider it, but then warned there could be a danger of the crop insurance payments becoming a “pass through” that wouldn’t benefit operators but could raise land rents and values.

Rodney Gangwish of Shelton, Neb., a former National Corn Growers Association president and a board member of the KAAPA Ethanol L.L.C. board in Minden, Neb., says 70 percent of his corn and soybean acres are in the ACRE program and that he considered it akin to purchasing a “put” in the grain market.

Gangwish says profit margins today with $3- and $3.50-per-bushel corn are as narrow as they were at $2 corn a few years ago. Meanwhile, yields on area commercial corn farms are “routinely” in the 240- to 250-bushel range, but he has a 150 Actual Production History because he plants seed corn.

Steve Masat of Redfield, S.D., president of South Dakota Wheat Inc. and a diversified farmer, says crop insurance covered 92 percent of South Dakota’s wheat in 2009. He says there is increased interest in winter wheat in northern South Dakota and parts of North Dakota because of yield, crop rotation and wildlife benefits.

“Unfortunately, crop insurance in northern South Dakota and North Dakota does not provide winter kill coverage for winter wheat,” he says.

His group is working with USDA’s Risk Management Agency and others to develop criteria and coverage.

Peterson says he thinks this kind of program is getting strong consideration in the 2012 bill.

Scott says the programs sometimes are too complicated for local FSA officials to keep up with. Members have said ACRE is especially complex, confusing and difficult to administer.

Scott VanderWal, a Volga, S.D., farmer and president of the South Dakota Farm Bureau, was one of the few in the panels to talk about fiscal responsibility. He says his group’s analysis of making the ACRE program county-based, for example, might make it cost-prohibitive.

VanderWal says his group would accept shifts of commodity program funding to crop insurance, where individual responsibility plays a part.

He says the SURE program must change to speed payments.

“A producer who is in danger of going out of business due to some sort of a disaster most likely does not have the financial ability to wait a year or more for that assistance,” he says.

Biotech, other issues

Panelists asked for a range of matters, matters, not specifically in the farm bill.

Duffy, from the corn growers, says 96 percent of South Dakota crops include biotech traits and that the world will need 70 percent more food to meet population increases expected by 2050 and that use of such traits is inevitable.

No one in the hearing spoke against biotech, which has been embroiled in lawsuits and opposition as the technology touches sugar beets, alfalfa and wheat. Rep. Betsy Markey, D-Colo., says farmers often seem to bear the risk of these technologies as tech providers come forward with it before market acceptance is worked out.

Doug Sombke of Conde, S.D., president of the South Dakota Farmers Union, asked for “substantial derivative market reform” to protect farmers from commodity market manipulation, as well as expediting Federal Emergency Management Agency payments to counties and townships to stabilize roads and bridges in the wake of the region’s excessive moisture.

Crop insurance is not a part of the bill, but several say it is an increasingly important piece of farm protection, with corn input expenses at $600 an acre. Scott, of the soybean producers, notes that this coverage is specific to his county and farm, while the ACRE program is not.

Wolle, who worked in agribusiness before starting farming in 2004, drew audience approval when he joked that he looks forward to working on the farm bill in 2052 — “when many of you will be retired.”

Wolle of Madelia, Minn., says it’s important that beginning farmers — those who have farmed fewer than 10 consecutive years — be given preferential treatment in the Environmental Quality Incentive Program and Conservation Security Program.

He says the average age of South Dakota farmers is 57 and the average in Minnesota is 53. He also suggested the government become the “lender of first resort” for beginning farmers, and that loan limits need to be increased to “constantly reflect the price of farmland” that beginning farmers may need to acquire.

Wolle thinks the government should offer farmers more “succession planning” and that the government should foster ways for young producers to interface and get involved in local leadership.

Despite all of this, Wolle and others on the producer panel extoll farming as an honorable and rewarding profession, even under the current policies.

“I’ve found that through working in it and through education that farming is a great job,” Wolle says. “Don’t tell it outside this room. It’s risky, but the rewards are great and the opportunities (to get into it) are unlimited.”

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