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Published August 24, 2011, 11:26 AM

Thune: Ag policies will change in next farm bill

RAPID CITY - The next farm bill is likely to look very different from the farm subsidy system America's agricultural producers have known.

By: Denise Ross, Daily Republic of Mitchell, S.D.

RAPID CITY - The next farm bill is likely to look very different from the farm subsidy system America's agricultural producers have known.

Sen. John Thune, R-S.D., delivered that message to a roundtable group that also included Rep. Kristi Noem, R-S.D., in Rapid City on Monday. It wasn't breaking news to the agricultural industry representatives at the meeting.

"We wouldn't like to see any cuts to the farm bill, but we understand reality," Jeff Smeenk of the South Dakota Cattlemen's Association told Thune.

Thune said farm bill programs have grown increasingly targeted for cuts in the nation's capital as commodity prices have risen. Combine that with a cultural divide and the aggressive push to cut federal spending - coming from Thune's own party and often Thune himself - and you've got the recipe for significantly altered farm policy.

"Too many policy decisions are going to end up being driven by budgets," he told the group of more than a dozen industry leaders assembled during Rapid City's Central States Fair.

He added that there is a "policy elite" writing regulations in Washington without understanding the effects on the ground.

"There's hostility towards the middle of this country, where food and fiber are raised," Thune said. "You encounter it every day out there. It's subtle, but it's not so subtle. People from the coasts just don't understand.

"They think they know what's best for the country, yet they have no idea how they affect the people who have to deal with it."

What does it all mean for the next farm bill? Direct payments to those who grow certain crops - wheat, corn, soybeans, barley, sorghum, oats, rice, peanuts, oilseeds and some cotton - are likely to fade into history, Thune said.

"Direct payments for sure, they're going to go after that," he said.

Other "low-hanging fruit" that could be cut or eliminated include the Conservation Stewardship Program, the Supplemental Revenue Assistance Payments Program (called SURE) which covers crop losses due to natural disasters, and the "permanent disaster" provisions which Thune fought to include in the 2008 farm bill.

The permanent disaster section of the bill was written to help farmers and ranchers hit hard by natural disasters, such as the severe drought South Dakota had suffered through, which weighed heavily on Thune's failed effort in 2002 to unseat Sen. Tim Johnson, D-S.D.

Noem said farmers are telling her they would be happy to drop most farm subsidy programs so long as a strong crop insurance program remains in place.

"Every meeting I go to, I hear, 'We're done with farm programs. We're going to see if we can make it,'" Noem said.

However, she said the momentum on Capitol Hill is toward cutting the premium subsidies now in place for crop insurance.

"Unfortunately, a lot of the conversations are about cutting the subsidies for crop insurance," Noem said.

She added that there is a mentality settling in that Congress should cut popular programs as they work for deficit reduction, believing that those programs will be restored in the future.

The freshman congresswoman called that backwards thinking and said, "Hopefully we can get our attitudes straightened out and cut the programs that really need cutting."

Many of the nation's agricultural subsidies have grown so complicated that farmers themselves often don't understand them, Thune and Noem were told. And Farm Services Agency employees are overworked, meaning payments are often received years after claims are filed.

For example, FSA offices are currently processing claims from 2009, said Grady Crew, a crop insurance agent and rancher from the Philip/Wall area. Private industry pays claims within 30 days, he said, adding that he hopes private industry can continue to handle crop insurance rather than shifting it all to FSA staffers.

Crew himself called for the elimination of direct payments in favor of insurance and a safety net that would kick in the event of low prices.

"The crop insurance program, I'm here to tell you, is working. The bankers are happy; the insureds are happy," Crew said. "My insureds tell me, 'If I could just have my insurance better and cheaper, I wouldn't worry about FSA programs.'"

Ranchers have it a bit different under current farm policy. They already do without direct payments and operate with a patchwork of programs designed to promote environmental practices and mitigate losses due to weather disasters.

Ranching leaders told Thune and Noem they would like to preserve the Conservation Stewardship Program, which provides financial incentives for practices such as rotational grazing. In addition, they like cost-sharing programs to make improvements such as water pipelines, the sod-saver program that encourages the preservation of grasslands and the Livestock Indemnity Program, which covers losses due to natural disasters.

Thune said he is unable to predict exactly which programs might survive in light of work to cut spending. Some have suggested that the next farm bill be completed before a small committee often called the "super Congress" issues a report in November.

That's unlikely, he said, meaning America's agriculture policy will almost certainly be interwoven with decisions on budget cuts.

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