HOUGHTON, S.D. - With the current low commodity price environment, farmers are relying more on farm program payments to help them stay afloat financially. This will make the farm safety net even more important as lawmakers write the next farm bill.
As a member of the Senate Agriculture Committee, U.S. Sen. John Thune, R-S.D., is working on various programs to be included in different titles of the legislation. The first to be rolled out is a new short term conservation and income protection program for farmers called the Soil Health Income and Protection Program, or SHIPP.
The program is designed to help prop up commodity prices and net farm income while providing soil health benefits. This voluntary conservation program requires farmers to set aside their marginal acres for three to five years, with a cap of 15 percent.
"This would give producers an opportunity to take the poorest producing land that they have and put it into a program for a shorter amount of time, get rental payments on that," Thune says.
After visiting with farmers across the state and nation, Thune said farmers wanted another alternative to the Conservation Reserve Program.
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"We hear a lot about, you know, a working lands conservation program. We hear a lot about a program that duration wise isn't as long as what we have with CRP, which really locks that land up," Thune says.
As a result, he believes SHIPP will fit a real need for producers.
To be eligible for SHIPP, land must have been planted or considered planted to a commodity crop for three consecutive years prior to enrollment. One base acre for each acre enrolled in SHIPP will be suspended and returned to the SHIPP-enrolled farm after a SHIPP contract expires or is terminated.
South Dakota farmers have mixed reaction to the program. For some it will give them a common-sense and flexible conservation alternative.
"We've talked about wanting an option that's shorter than a 10-year commitment to CRP. So, if you have some marginal land that works for you, if you have cattle and can graze in the fall I think that's probably a nice option," says Troy Knecht, South Dakota Corn Growers Association president and Houghton farmer.
Under SHIPP, farmers receive additional crop insurance assistance, but the payments would be half the CRP rental rate. Farmers must also bear the cost for perennial grass seed or a cover type crop. So, for some farmers, that may not be enough of an incentive to take those acres out of production, even for a shorter duration.
"That's going to be one of the drawbacks that I see as a producer," says John Horter, South Dakota Soybean Association treasurer and Andover farmer. "When commodity prices are low we need to find ways to be as profitable as possible, so that's going be a big consideration if the rental rates aren't as competitive."
Horter says the other issue he sees is marginal acres are often in the middle of the field where idling land is just not workable.
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Knecht says the attractiveness of the program will vary throughout the state and country.
"If you've got a lot of marginal ground and you're not profitable on those acres, maybe it's a great deal for you," he says.
However, he notes, as diverse as agriculture is in South Dakota, more options are good for farmers.
"Because it's so different from all corners of the state," Knecht says.
Thune's goal is for this proposal to be budget neutral, but they are still awaiting a score from the Congressional Budget Office. So far there is no companion legislation in the House, but he says he has had good interest from other ag committee members and believes he can get enough support to include it in the next farm bill.
