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Published August 29, 2011, 04:42 AM

Farmers hoping some type of safety net survives in new farm bill

CASTLEFORD, Idaho — On a recent summer day, Jon Wells walked along the irrigation line bordering his cornfield, adjusting the flow of water that runs between the field’s rows.

By: Ben Botkin, Associated Press

CASTLEFORD, Idaho — On a recent summer day, Jon Wells walked along the irrigation line bordering his cornfield, adjusting the flow of water that runs between the field’s rows.

Later, he loaded hay bales into his truck, moving them to the field where beef cattle will graze later this year. Wells and his wife, Carol, have farmed north of Castleford, Idaho, since 1975, tending 925 irrigated acres that also produce wheat, alfalfa and beans.

Their business — like that of other farmers throughout the U.S. — faces a potential overhaul in the upcoming year. The federal farm bill expires in 2012, and agricultural industries are hoping to either preserve or, in some cases, change what’s in place.

It’s no small task: the U.S. Department of Agriculture-administered farm bill passed in 2008 was some 1,770 pages of heavy reading. Renewed every four to five years, the bill sets the nation’s long-term agricultural and food policies. Included are myriad programs that helped pump millions into the nation’s ag industry. The reasons for the aid vary: Loans, subsidies that aid low market prices, conservation programs and help for farms hit with natural disasters are among them.

The first farm bill, called the Agricultural Adjustment Act, was put into place in 1933 with the nation in the throes of the Great Depression. It paid farmers to not plant a portion of their land so crop values would increase. Like other government programs, it has become more complicated and expensive since. So has farming.

Risky business

The nation once again is suffering an economic setback as Washington examines agriculture and the federal programs intended to help it. But now, the farm bill’s pending renewal comes amid a growing chorus both in Congress and the public to pare back federal spending — in agriculture and elsewhere.

Farming in rural Idaho isn’t for the faint-hearted. The hours vary — baling hay at night and working seven days a week are the norm.

With an income riding on a crop’s outcome, the job doesn’t offer a steady paycheck either.

That’s where the risk comes in. Crop market prices fluctuate and so do yields. Overhead costs rise, particularly when diesel costs increase. Disasters can wipe out or heavily damage a crop.

Carol Wells is a member of the elected three-person committee for the Twin Falls County, Idaho, Farm Service Agency office, which administers USDA programs locally. She says the most valuable farm bill programs help producers get through an economic or natural disaster like hail or fire.

“The producers in the Magic Valley are people who want help if they have a problem, but they don’t want to be underwritten just so they can stay in business,” she says.

The term “subsidy,” she says, has a negative implication.

“A subsidy sometimes implies to the public that we’re just writing the producer a check because the producer’s there,” she says, adding that farmers must qualify for programs.

Wells says it’s important for the farm bill to continue giving a voice to agriculture.

“More and more it seems to lean away from that, and that is what we will be watching as a Twin Falls agency to see how will this support and help our producers so that they can be the most productive,” she says.

Necessary policy

Dick Rush, Idaho director of the USDA’s Farm Service Agency, says one needs only to look at natural disasters that hit farms throughout the country to see the need for farmers to have a safety net.

“I think one of the arguments we hear about is: ‘Farms are prosperous right now; prices are up. Why would they need any support?’” he says. “And I think those kinds of disasters demonstrate to me why this business is so risky and sort of epitomizes the concept of a safety net. . . . It doesn’t matter what the price of wheat is at. If you don’t get a crop, you don’t get anything.”

Loan guarantees, a big part of FSA programs, are crucial especially for farmers starting out, he says, noting that the cost of a combine machine alone is more than $200,000.

“Farming is an extremely risky business; we can’t project or control the weather,” he says. “It’s pretty good public policy to make sure we have a system to keep farmers on the land.

Finding loopholes

In recent years, federal farm programs haven’t been immune to criticism — and not just because of the money involved.

For example, the Los Angeles Times reported in February cases of farmers committing insurance fraud to bilk the federal government out of money. A North Carolina tomato grower used a bag of ice and a camera to falsely claim damage from a hailstorm, according to the report.

In California, a federal investigation led to charges against a farmer after finding only rocks and sagebrush where the defendant claimed he planted wheat.

In other cases, loopholes in the system have allowed legal but questionable practices. A Washington Post investigation found in 2006 a widespread pattern of more than $1 billion in subsidies for rice and other crops paid to property owners who never planted crops on formerly farmed land.

“While there are inevitably cases where farmers have misused the programs, the major problem is that the policies themselves are so broken that all kinds of outrageous behavior is perfectly legal,” says David DeGennaro, a legislative analyst with Environmental Working Group.

DeGennaro says the farm bill needs an overhaul to reward environmental stewardship and increase support for programs that promote healthier foods like fruits, vegetables and organic food.

“We think the farm bill should be reoriented to reflect a national food and farm policy that works for everyone, not just a narrow band of special interests,” he says. “The farm safety net should be reformed so that it helps struggling farmers stay on the land only when they need the help, rather than guaranteeing a set revenue stream for big grain farmers as it does now.”

As for subsidies, he says: “Farm subsidy programs have been cobbled together over many decades, so the current system is clunky, confusing, duplicative and wasteful.”

The complexity of the farm bill comes in part from the varying needs of different producers in the agricultural system.

Growers’ needs varied

The needs of one group of growers are different based on each situation.

Mark Duffin, executive director of the Idaho Sugarbeet Growers Association, for example, thinks that the policy now in place for growers should continue. The government’s loan program, for example, helps sugar beet growers, who have a lengthy two-year cycle when factoring in tending the crop, harvesting it, processing and marketing it.

“As the company markets the sugar and they repay it, it’s not cost to the government, but it helps the growers to get their money to pay their bills,” he says.

Sugar beet growers in Idaho and the U.S. have outside competition: More than 100 countries also produce sugar.

Current policies limit tariff-free imports of sugar from other nations to 20 percent of the U.S. market. Other nations still can ship in sugar beyond that level if they wish, but are required to pay tariffs if they do so.

“It’s helped keep us in business,” Duffin says.

But with the farm bill up for renewal, the sugar beet industry will be lobbying to keep the tariff cap in place.

“Every time we do a farm bill, that’s all back on the table,” Duffin says.

The dairy industry, on the other hand, is hoping for change. The Idaho Dairymen’s Association supports the National Milk Producers Federation’s platform, which calls for removing the existing Milk Income Loss Contract, which provides payments when milk prices are low. The dairy industry argues that the existing system needs a shakeup based on the operating margin of producers — not the price of milk alone.

The industry contends that other factors like increased feed, corn, alfalfa and soybean prices that impact dairy operations also need to be taken into account.

“Obviously the current system is broken,” says Bob Naerebout, executive director of the Idaho Dairymen’s Association. “It doesn’t function.”