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Published January 16, 2012, 11:42 AM

AFBF's farm bill proposal

HONOLULU —The new farm bill proposal that the America Farm Bureau Federation has been promoting in Washington would make higher payments when crop producers experience deeper losses, while the programs that other commodity groups have promoted would make smaller payments more frequently, Farm Bureau lobbyist Mary Kay Thatcher explained in a session to delegates on Jan. 8.

By: Jerry Hagstrom, Agweek

HONOLULU —The new farm bill proposal that the America Farm Bureau Federation has been promoting in Washington would make higher payments when crop producers experience deeper losses, while the programs that other commodity groups have promoted would make smaller payments more frequently, Farm Bureau lobbyist Mary Kay Thatcher explained in a session to delegates on Jan. 8.

The Systemic Risk Reduction Program is a catastrophic revenue loss program, Thatcher said. Farm Bureau economist John Anderson noted that SYRRP “keeps paying out the deeper the loss.”

Farm Bureau delegates later adopted the principles of the SYRRP, but dropped the name the staff has been using and added a provision to maintain the current commodity loan rate program with the possibility of higher loan rates.

Farm Bureau’s board opposed all the program options that the commodity groups proposed and that the agriculture committee leaders sent to the failed supercommittee on deficit reduction, on the grounds that the policies would encourage farmers to plant to get government benefits rather than follow market incentives and not address farmers’ biggest needs.

The programs in the supercommittee proposal would have offered most crop producers the option of signing up for a “shallow loss” program called Agricultural Risk Coverage that would make payments to them for what crop insurance did not cover or signing up for payments that would be triggered by higher target prices. Cotton growers would get a separate program known as the Stacked Income Protection Plan or STAX.

Farm Bureau President Bob Stallman told the farmers in his annual address that the Farm Bureau proposal would protect them from their biggest challenges.

“This program is unique in that it will help protect America’s farmers from losses that truly endanger the very core of their farms, like catastrophic losses,” Stallman said. “While at the same time, it recognizes today’s new budget realities. It is also unique in that it can be applied to a broader range of commodities, like fruits and vegetables.”

In addition to making the payments for deeper losses, the Farm Bureau proposal would lead to a rerating of farmers’ crop insurance policies that would lead to drops in premiums. The program would be delivered through the crop insurance industry, however.

Thatcher said she believes that ARC likely won’t survive further scrutiny, but if so another shallow loss program will be proposed.

Among the uncertainties about ARC, she noted, are whether the payments are made at the farm, crop district or county level, on what previous crop record — the last year, an Olympic average or other basis — the payments will be made, and whether there would be payments on acres that could not be planted for weather reasons.

She also noted that for budgetary reasons the final proposal that went to the supercommittee would have made the payments on only 60 percent of acreage.

In other comments, Thatcher noted that:

The cost of crop insurance premium subsidies has risen to $7 billion in 2011, and crop insurance costs are likely to come under attack if they remain high.

The bill to impose stricter payment limits won support even from southern senators.

Conservation and environmental groups are generally pleased with the conservation title of the bill developed so far, and they are likely to focus on tying conservation compliance to the crop insurance program if direct payments are eliminated.

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