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Published May 29, 2012, 08:32 AM

Prices and payments

WASHINGTON — As the Senate appears ready to take up a farm bill that would make payments to farmers when their revenue goes down, House Agriculture Committee ranking member Collin Peterson, D-Minn., says after spending a week in his district, he is determined to put a target price and countercyclical payment program in the House version of the bill.

By: Jerry Hagstrom, Agweek

WASHINGTON — As the Senate appears ready to take up a farm bill that would make payments to farmers when their revenue goes down, House Agriculture Committee ranking member Collin Peterson, D-Minn., says after spending a week in his district, he is determined to put a target price and countercyclical payment program in the House version of the bill.

The Senate is expected in early June to take up the bill that the Senate Agriculture Committee passed on April 26 and the House Agriculture Committee is expected to consider the bill later in June.

The core of the commodity title that Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., and Senate Agriculture Committee ranking member Pat Roberts, R-Kan., have written is a program that would make payments to farmers for some of the losses not covered by crop insurance. But those payments would be based on the difference between a farmer’s revenue and a five-year Olympic average of revenues in past years. Peterson said this system would mean that if there were several years of low prices, the farmer’s base revenue would decline and so would any support. Therefore, he contends, the system of target prices that would trigger countercyclical payments should be continued and the target prices should be raised to levels in line with current commodity prices and the cost of production.

Peterson said in a May 24 telephone interview that the farmers in his district “almost universally think (the target price and countercyclical program) is the preferred option.” Peterson noted that the Minnesota Corn Growers Association “are on board with target prices,” which puts them at odds with the National Corn Growers Association, which favors the revenue approach.

The National Corn Growers, the American Soybean Association, the American Farm Bureau Federation and the U.S. Dry Pea & Lentil Council have also testified against continuing target prices and raising them on the grounds that target prices might skew planting decisions and that farmers would grow for the program rather than for the market. Rice and peanut groups and the National Farmers Union have testified in favor of target prices.

But Peterson argues that target prices alone will not change planting decisions and that if they do, target prices should be raised for the crops that farmers would be less likely to plant.

House Agriculture Committee Chairman Frank Lucas, R-Okla., is also in favor of including the target price option as well as the revenue option in the farm bill, which assures that target prices will be in the House bill.

No movement yet

It’s unclear whether any senators will try to offer a target price option amendment on the Senate floor when that bill comes to the floor in June. Sens. Kent Conrad, D-N.D., Max Baucus, D-Mont., and John Hoeven, R-N.D., included a target price program in their farm bill, but did not object to the Senate bill moving forward without it.

In Washington, the battle between a revenue approach and target prices has been seen as a north-south battle because rice and peanut growers have said the revenue approach does not work for them and they want a target price. But Peterson and Lucas have stressed that they do not consider this to be a regional battle because they think all farmers should have a choice of a revenue approach or a target price.

Meanwhile, in Washington, all eyes are focused on whether the bill can pass in the Senate, where the current political atmosphere almost always requires 60 votes to end debate and move to passage of a bill.

If southern senators do not support the bill, that makes passage difficult, but Stabenow has said she has the votes for passage and she and Roberts have also said they are still working with southerners to try to get their support.

“We have broad support. In the Senate these days it seems like you always need 60, but I’m confident that we have 60,” Stabenow told Agweek recently.

But dairy farmers, specialty crop producers, conservationists, foresters and renewable energy producers are lobbying hard for the Senate bill because they like the provisions affecting them.

The Specialty Crop Farm Bill Alliance, which includes the United Fresh Produce Association and Western Growers, issued a statement that the group “believes the Senate farm bill is a very strong measure that will benefit fruit, vegetable, tree-nut, wine-grape and nursery producers across the country. It builds on the 2008 farm bill efforts specifically investing in key policy areas including research, pest and disease, international market access, state block grants and nutrition priorities.”

Stabenow is strongly defending the commodity title she wrote with Senate Agriculture Committee ranking member Roberts. “It is real reform and we can say the government is not going to tell folks what to plant, or what the price is going to be,” Stabenow said in the interview. “It is going to be determined by the farmer and by the market. I think that’s a real strength of our proposal.”

But Stabenow also acknowledges that at some point, she will have to compromise with the House and the southerners if the bill is to become law. “We know we are in a different spot,” Stabenow said. “We will have to find a way to come together.”

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