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Published October 31, 2011, 05:28 AM

‘A monumental shift’ in farm policy

WASHINGTON — While leaders of the Senate and House agriculture committees fend off statements that no farm bill is necessary when farmers are so prosperous, they and their staffs — particularly their staffs — are expected to work through the weekend to try to complete a farm bill proposal for the supercommittee in charge of deficit reduction by Nov. 1, aides told Agweek in a series of interviews last week.

By: Jerry Hagstrom, Special to Agweek

WASHINGTON — While leaders of the Senate and House agriculture committees fend off statements that no farm bill is necessary when farmers are so prosperous, they and their staffs — particularly their staffs — are expected to work through the weekend to try to complete a farm bill proposal for the supercommittee in charge of deficit reduction by Nov. 1, aides told Agweek in a series of interviews last week.

After Vincent Smith, a professor at Montana State University who also is a consultant to the American Enterprise Institute, told the New York Times and NPR that the farm program cannot be justified because many farmers have incomes above the national average and the new proposal to cover losses not covered by crop insurance, Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., said the new program amounts to real reform.

“We are undertaking a monumental shift in federal farm policy — one that saves billions of taxpayer dollars by ending payments to farmers who don’t need them,” Stabenow said in an email. “U.S. farm policy should be based on risk management and only help farmers when they are in distress, facing events such as natural disasters or sudden drops in price,” Stabenow said. “Farming is a uniquely high-risk undertaking that is vital to our economic and national security; we cannot afford to have farmers wiped out by a single disaster beyond their control. I am confident that this bipartisan effort, while difficult, will result in a vastly different and far more cost effective way to protect our nation’s food supply.”

Looking for a crack

House Agriculture Committee Chairman Frank Lucas, R-Okla., told Agri-talk radio that he and ranking member Collin Peterson, D-Minn., had to take the opportunity to try to push a bill through the supercommittee.

“We are war-gaming policy options,” Lucas said. “We’re trying to look at every possible way to address these things, because if a window of opportunity appears, we need to pull everything together and make it happen. If I could tie down the resources that are available for a farm bill for the next five years, you bet . . . I’m going to jump through the narrowest crack and the tightest window to get it done.”

The guiding factor in writing the bill is how to allow for a $23 billion cut over 10 years while still maintaining viable programs, the aides said.

In interviews given on the condition of anonymity, the aides revealed some of the details of what has been happening in recent weeks as they have tried to write a new, cheaper farm bill while critics have questioned whether there needs to be a farm bill at all when farmers are so prosperous.

“We’ve looked for a way to do this that is not just a numbers game,” one aide said. “We try to deal with consolidating programs, finding savings. An across-the-board cut doesn’t make a lot of sense. With Title I, you just don’t want to go lopping off programs.”

Staffers are trying to write a crop program that will protect farmers from shallow losses and disasters while encouraging them to maintain current levels of crop insurance. The crop insurance industry and the American Farm Bureau Federation have expressed concerns that the proposal under consideration might lead to cuts in crop insurance purchases, but staffers are trying to avoid that outcome while still offering farmers additional protection for losses not covered by crop insurance.

The issue of a farmer’s declining actual production history and how that affects potential crop insurance benefits probably will have to be handled within the crop insurance program, not in the “shallow loss” program. Payment limits would probably be dealt with “in the design of the program,” one aide said.

The agriculture leaders are “searching for some common ground, but the biggest challenge is writing a program that fits across all geographic areas,” one aide said. “We have to do some crop-specific things. Cotton doesn’t use buy up in crop insurance. We might do crop specific tweaks.”

But the aide added, “Even though time is short, I feel confident that minority and majority are really working to come up with something everybody can live with.”

Higher prices, higher value

Speaking of the disaster programs that expired on Sept. 30, one aide said “there is a myriad of different ways to try to get to that point.”

The core of the new revenue programs appears to be the bill that Sens. John Thune, R-S.D., and Sherrod Brown, D-Ohio, have written, but the staffers also are trying to take into consideration the concerns of Senate Budget Committee Chairman Kent Conrad, D-N.D., that the new program must provide help to farmers and ranchers when disasters occur.

Of concerns that crop insurance is becoming expensive to the farmer and to the government, one aide said that the reality is “with prices being what they are, you are insuring a much more valuable crop.”

The way that Sen. Charles Grassley, R-Iowa, divided up the cuts in a conversation with reporters — $15 billion from the commodity title, $4 billion each from conservation and nutrition — added up, but one aide said it still is difficult to come up with a breakdown.

“Trying to share equal pain doesn’t make sense,” an aide said.

Making any cut in the nutrition programs is turning out to be difficult, the aide said.

“I wouldn’t close the door on it, but the biggest struggle is that you are in an economy (in which) people say ‘I have paid taxes all my life and now I need food stamps.’ At the same time, you want to make sure the funds are being used in the best manner.”

Of the programs that don’t have any baseline, such as the energy development programs, an aide said “We would like to, but I’m not sure how we do it in this environment. Some of that, we will have to wait and see how the rest of these policies shape up. Ideally we want to continue investment in energy.”

Likewise, one aide said, it is hard to maintain the budget for agricultural research even though members and aides realize that research is vital to the future of U.S. agricultural and meeting a goal of feeding more people in the future. A coalition of 1,200 universities, agriculture groups and businesses just wrote congressional farm leaders urging them to at least maintain the current level of support for agricultural research in the bill.

“For every $1 invested in publicly funded agricultural research, $20 in economic activity is generated,” the groups said.

Although dairy processors and some senators have been critical of the dairy proposal that Peterson has proposed, “Peterson has really been leading the discussion on dairy,” an aide said.

Sweetener users have been pushing for easing restrictions on sugar imports, but it’s unlikely there will be many changes because the current program doesn’t have a federal budget cost.

“It will be hard to make changes that don’t cost money,” an aide said.

Conservation proposal

On the conservation programs, the ideas proposed by Sen. Richard Lugar, R-Ind., and Rep. Marlin Stutzman, R-Ind., are in the mix, an aide said, because “Lugar is a very respected voice.”

The Lugar-Stutzman conservation proposal would reduce the size of the Conservation Reserve Program, which idles land, and consolidate programs on working lands, saving an estimated $11 billion over the next 10 years. The proposal lowers the maximum enrollment in the Conservation Reserve Program from the current 32 million acres to a new cap of 24 million acres and phase in the new acreage cap over three years, with a cap of 30 million acres in fiscal year 2012, 26 million acres in fiscal year 2013 and 24 million acres in fiscal year 2014 and beyond.

The proposal also would eliminate the current separate structures of the Wetlands Reserve Program, the Grasslands Reserve Program, the Farm and Rand Lands Protection Program and the Healthy Forest Reserve Program and consolidate them into an easement benefits program with mandatory funding of $1 billion per year.

It also would eliminate the structures of the Environmental Quality Incentives Program, the Conservation Stewardship Program, the Agricultural Water Enhancement Program and the Wildlife Habitat Incentive Program and combine them into one working lands program with mandatory funding of $2.25 billion per year.

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