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Published May 21, 2012, 08:46 AM

Senate farm bill not a sure thing

WASHINGTON — Forty-five senators and a wide range of national farm and commodity groups have urged Senate leaders to bring the farm bill that passed the Senate Agriculture Committee on April 26 to the floor, but most southern senators and rice and peanut growers remain opposed to the bill. House Agriculture Committee Chairman Frank Lucas, R-Okla., and ranking member Collin Peterson, D-Minn., have said they will take a different approach.

By: Jerry Hagstrom, Agweek

WASHINGTON — Forty-five senators and a wide range of national farm and commodity groups have urged Senate leaders to bring the farm bill that passed the Senate Agriculture Committee on April 26 to the floor, but most southern senators and rice and peanut growers remain opposed to the bill. House Agriculture Committee Chairman Frank Lucas, R-Okla., and ranking member Collin Peterson, D-Minn., have said they will take a different approach.

The commodity title of the Senate bill is based on providing payments to farmers to cover some of the revenue losses they experience that are not covered by crop insurance. But rice and peanut growers say that program will not work for them and Lucas and Peterson say that all farmers should have the option of a program that would make payments when prices of commodities fall below certain levels.

Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., said in a May 16 call to reporters, “This is real reform . . . it is fair for every crop.”

Not a fan

But House Agriculture General Farm Commodities and Risk Management Subcommittee Chairman Michael Conaway, R-Texas, opened a May 16 hearing with a scathing critique of the Senate bill.

“I do not believe that our counterparts in the Senate have made passing a farm bill this year any easier,” Conaway said in opening prepared remarks.

“The Senate bill undermines crop insurance by setting up a revenue program that competes with and duplicates crop insurance,” Conaway added. “In fact, CBO (Congressional Budget Office) indicates that the budget for crop insurance declines by about $2.4 billion as producers reduce the coverage they now buy in favor of free coverage.

“Plus, when you leave out money carried over from the commodity title to crop insurance to pay for STAX (the new cotton program), the net cut to crop insurance is over $700 million,” Conaway said. “Crop insurance is also taking a drubbing in the press as editorial boards and everyone else confuses successful crop insurance with the Senate’s new revenue program.

“To be clear, I am not opposed to a farm policy that helps producers cover a portion of their deductibles, which can be very high,” he said. “But I am convinced the Senate’s approach is the wrong way to do it.”

Conaway added that he thinks a proposal made by Rep. Randy Neugebauer, R-Texas, the Supplemental Coverage Option, is on the right track. “If a producer wants to cover shallow losses, he can buy coverage to do that,” Conaway said.

“In short, the Senate bill has no price protection and is, therefore, not bankable to farmers and not fiscally responsible to taxpayers,” Conaway said.

“So far, this problem has been misreported as a north-south issue. But, let me just say this: If we have a few more weeks of commodity prices taking the kind of thumping that they took last week (May 7 to 11), the importance of meaningful price protection in a farm bill will become clearer to everyone. “

“This and all the rest leads me to conclude that what the Senate has before it cannot be called a farm bill at all,” Conaway said. “Fortunately, I am confident that in the House process we will cut spending, we will reform and streamline policies, we will eliminate duplication and achieve regulatory reform, and in this process, we will restore balance and equity and put the ‘farm’ back in the farm bill.”

Other views

Lucas did not criticize the Senate bill, but he endorsed the price protection the Senate bill does not include.

“That safety net has to exist for all regions and all crops, and it has to be written with bad times in mind,” Lucas said. “That’s why it is vitally important that the commodity title provide producers with options so they can choose the program that works best for them, whether it is protecting revenue or price.”

Peterson already said he agrees with Lucas that the system of target prices and countercyclical payments should be continued. Peterson also noted that, after the price-triggered payments were ended in the 1996 farm bill, Congress bailed out farmers with ad hoc disaster payments.

But, Peterson added that given the fiscal problems now, “you can forget about getting bailed out, so if you get this thing wrong, good luck.”

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