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Published August 29, 2011, 05:29 AM

Lobbyist says farmers need diversity in safety nets

BRAINERD, Minn. — Farmers still need a safety net besides crop insurance, a key farm lobbyist said during discussions of the Minnesota Ag Leadership Conference the week of Aug. 15 in Brainerd, Minn.

By: Jerry Hagstrom, Special to Agweek

BRAINERD, Minn. — Farmers still need a safety net besides crop insurance, a key farm lobbyist said during discussions of the Minnesota Ag Leadership Conference the week of Aug. 15 in Brainerd, Minn.

All the money in the farm bill could be moved into crop insurance, “but from both a policy and political perspective, it is good to have diversity,” said Tom Sell, a former House Agriculture Committee deputy chief of staff who now is a partner in the Lubbock, Texas-lobbying firm Combest-Sell, with former House Agriculture Committee Chairman Larry Combest, R-Texas.

“Crop insurance is business-oriented,” Sell told the Minnesota Ag Leadership Conference, which was sponsored by Minnesota Corn, one of his clients. If farm prices plummet, crop insurance payout rates will go down to reflect those prices, he noted, adding, “You can’t adjust to that. You don’t want all your eggs in one basket. “

Sell moderated one of several panels on which academics, lobbyists and congressional staff discussed the upcoming farm bill and crop insurance.

Possible tactics

Joe Outlaw, a professor at Texas A&M, said that farmers should not be so concerned about budget cuts. With $210 billion in the farm program over 10 years roughly split among commodity programs, crop insurance and conservation, “there’s still a lot of money” in the farm budget, he said.

Outlaw said his priorities for a farm bill are programs that provide help “when it’s needed and doesn’t when it’s not,” that can be explained, that keep people farming, that can be accepted by bankers and that have minimal overlap.

Outlaw described marketing loans as “almost perfect” and said that the countercylical program “passes most tests,” but he doesn’t like the average crop revenue election program known as ACRE “because it doesn’t work for everybody.”

Target prices could be raised without much budget exposure, he said.

Carl Zulauf, an Ohio State University professor, said ACRE and the SURE disaster program should be combined to create a single program to address shallow loss and multiple-year loss.

Art Barnaby, a professor at Kansas State University, said convergence between futures and cash prices at delivery points need to be improved, that the crop insurance infrastructure needs to be maintained even if Congress reduces the USDA budget. He also said that farmers’ yield records need to be adjusted.

Brandon Willis, a senior policy adviser to Agriculture Secretary Tom Vilsack, said USDA will advise Congress that if the agency’s personnel budget is reduced, and that Congress must simplify programs so they can be properly administered.

“No one is talking about the budget to administer programs,” Willis said. “You can’t keep cutting budgets and creating programs.

A key congressional aide who asked not to be identified said that if USDA has to reduce staff, the agency will try to keep as many employees as possible in the agencies that have regulatory powers, such as the Food Safety and Inspection Service and the Animal Plant and Health Inspection Service. Other agencies, such as the Foreign Agriculture Service, are more likely to lose staff, the aide said.

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