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Published February 17, 2012, 08:21 AM

THUNE: Challenging environment confronts farm bill work

As a member of Congress representing South Dakota in both the U.S. House and Senate, and a member of the Agriculture Committee in both bodies, I have had the privilege of being actively involved when the last three farm bills were written.

By: US Sen. John Thune, Guest columnist

As a member of Congress representing South Dakota in both the U.S. House and Senate, and a member of the Agriculture Committee in both bodies, I have had the privilege of being actively involved when the last three farm bills were written.

While the 2012 Farm bill will be the greatest challenge of any farm bills I have helped draft, I look forward once again to making certain that agriculture, South Dakota’s number one industry, and our state’s farmers and ranchers will be well represented in Washington.

Several obstacles have emerged that will make writing the 2012 farm bill much more difficult. The agriculture economy is one of the healthiest sectors of the U.S. economy right now, thanks to higher than normal crop and livestock prices over the past year.

Unfortunately, too many members of Congress representing urban populations do not understand the cyclical nature of the prices farmers receive, nor do they realize that higher prices do not isolate farmers from risk.

Reflecting back on the 2011 crop year, I am reminded of the excessive flooding in Northeast South Dakota that resulted in more than a million acres of corn that was prevented from being planted, and the very dry fall and winter the entire state has experienced that could jeopardize the 2012 winter wheat crop planted last fall.

Regardless of whether crop and livestock prices are low or high, agriculture will remain risky. Land costs, seed, chemical, and fertilizer costs have all risen dramatically over the past few years, and these input costs rarely fall when crop and livestock prices drop.

At every farm bill roundtable and in meetings with farmers and ranchers across South Dakota, they have made very clear to me that risk management is clearly their top priority. Crop insurance administered through the U.S. Department of Agriculture’s (USDA) Risk Management Agency and delivered by private insurance agents has been providing the risk protection agriculture producers need most.

In 2011, South Dakota agriculture producers insured more than 15 million acres with crop insurance. Total liabilities amounted to just over $5 billion; and so far for the 2011 crop year, actual indemnities paid in South Dakota are $457 million. These numbers tell us just how important crop insurance is to South Dakota agriculture and why one of my highest priorities is to keep crop insurance working well for South Dakota producers and consumers across the country who rely upon a viable agricultural sector.

Another 2012 farm bill challenge is funding. Last year I introduced a bill that eliminates direct payments, the Average Crop Revenue Election Program (ACRE) and the Supplemental Revenue Assistance Payments Program (SURE), and replaces these programs with one simpler program, the Aggregate Risk and Revenue Management (AARM) program that provides assistance in years when crop insurance indemnities need to be supplemented. Keep in mind, my proposed program provides assistance only in years it is needed and saves taxpayers $20 billion over 10 years when compared to the current agriculture programs it replaces.

Farm bill conservation titles are also critically important to South Dakota because they authorize land stewardship programs that help farmers protect the soil, water, and air, and provide habitat for wildlife such as the ringneck pheasant, which adds more than $200 million to South Dakota’s economy each year.

South Dakota farmers have more than 1.1 million acres enrolled in the Conservation Reserve Program (CRP). However, CRP enrollment has been dropping over the past few years and is expected to drop even further due to higher commodity prices. In 2012, CRP contracts covering 224,000 acres of South Dakota land will expire. Because of the challenges Congress faces with the next Farm bill, I am working to redesign CRP into a program that will continue to protect marginal and fragile lands and provide wildlife habitat, yet be more flexible and allow other limited uses, making it more attractive to landowners.

Writing a 2012 farm bill will be a challenge, and I appreciate the farmers, ranchers, and others from South Dakota who have shared with me what policies are successful and which ones need to be changed. With their help, I am confident the 2012 farm bill will meet the needs of South Dakota agriculture.

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