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Published May 28, 2013, 10:09 AM

Why we need a 5-year farm bill

If we are to make sure rural North Dakota remains a place where families choose to live and businesses are able to grow, it’s critical we pass a five-year farm bill.

By: Heidi Heitkamp, Agweek

WASHINGTON — I recently worked with other members of the Senate Agriculture Committee to draft and pass out of committee a five-year farm bill. This marks the next act in a play that began too long ago.

Unfortunately, the previous Congress was unable to pass a long-term bill and rural North Dakotans were forced to settle with a one-year extension. As a result, North Dakotans have been waiting for almost two years for a farm bill to give them the certainty they need to run their businesses.

If we are to make sure rural North Dakota remains a place where families choose to live and businesses are able to grow, it’s critical we pass a five-year farm bill.

Agriculture is the No. 1 industry in North Dakota, providing the greatest economic impact and supplying the strongest employment. The cornerstone of the agriculture sector is the family farmer — and my priority as a North Dakota senator is to make sure policies are crafted in ways that let farmers stay in business in the face of incredible risks.

North Dakota growers must spend upwards of a million dollars simply to put a crop in the ground in the hopes of earning a modest profit at the end of the year. What’s more, North Dakota growers each year face challenges completely out of their control such as flood, drought, price collapse and the introduction of new pests and pathogens.

These risks are especially threatening to new and beginning farmers who have yet to build up the equity and capital reserves needed to finance a crop the year after a disaster.

With economic globalization and the increased sophistication of agricultural markets, American growers now are exposed to market volatility like never before. Because of greater connectivity in the marketplace, events that occur in far-flung places can affect the price of commodities at the local grain elevator.

This hurts farmers by affecting the prices they hope to return when they make planting decisions. In the course of a crop year, volatility can contribute to price drops that turn a profitable crop into a major loss. This underscores the need to have some form of price protection to help farmers withstand price shocks that spread through global markets.

Planning for the future

Growers in North Dakota have been blessed with strong prices in recent years, but many of us remember the difficult price conditions that occurred in the 1980s and early 1990s. Farm programs must be designed while keeping the bad times in mind to meet the needs of growers when difficulties return in the future.

The farm bill will provide growers with the support they need to survive the tough years and thrive in the good ones. Specifically, the Senate draft authorizes a new commodity program called Agricultural Risk Coverage.

This program will kick in when farmers lose money — from either yield losses or price collapse — to provide modest payments to help cover some of the losses they experience. It uses a market-oriented approach to adjust support when prices are high to keep pace with increased costs in inputs.

It also will track with the market and pay growers on historical production to prevent the policy from influencing planting decisions. ARC will work in concert with the Federal Crop Insurance Program to let growers mitigate the variety of risks they face each year.

As the risks pile up for American farmers, it’s critical that our nation strengthens its commitment to a strong domestic agricultural economy. American farmers are some of the most efficient and productive farmers in the world, which is why the American agricultural system is the envy of the world. But for that to remain the case, we need to continue to make modest investments to the farm safety net to support farmers in North Dakota and throughout the country.

I look forward to working with my colleagues on the Agriculture Committee and in the Senate as a whole to push this needed legislation to the finish line. Rural Americans deserve nothing less.

Editor’s Note: Heitkamp, a Democrat, represents North Dakota in the U.S. Senate.

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