Time to tackle farm bill

Time to tackle farm bill

THIS year's farm bill debate will officially get under way May 14 in the Senate and May 15 in the House.

At press time, Senate Agriculture Committee chair Debbie Stabenow (D., Mich.) had released her official mark, and the House was expected to follow suit before the weekend.

Stabenow's bill has many similarities to last year's version, with a targeted savings of $23 billion; it offers the target price option sought by southern producers and her new ranking member, Sen. Thad Cochran (R., Miss.).

The House bill's savings are more ambitious, at $38 billion total, with $20 billion coming from food assistance and $18 billion from the other titles.

As a starting point, the Senate bill repeals direct payments and programs from the last farm bill, including the Average Revenue Crop Election program and the countercyclical program. The countercyclical program would be replaced with target prices for covered commodities the same as the countercyclical prices are now, except for rice and peanuts.

National Farmers Union president Roger Johnson welcomed the move but said, "in order to be substantial, target prices need to be increased and balanced in a meaningful way. We urge the inclusion of stronger protection against long-term price collapse for all commodities in all regions."

The Senate bill gives farmers the choice to participate in Agricultural Risk Coverage, which allows farmers to enroll in individual coverage or county coverage offering shallow loss protection if prices or yields fall.

Earlier this year, the Congressional Budget Office reduced the estimated cost savings of the farm bill from levels it projected had the legislation passed in 2012. As such, the agriculture committees had to tweak programs to provide the same amount of cost savings.

The supplemental coverage option in the crop insurance title of the Senate farm bill allows farmers to buy a county-based average yield insurance that would supplement their individual insurance policy. To offer more savings, the Senate bill reduces the government-subsidized premium level to 65% of the coverage cost from last year's level of 70%. The deductible for those who enroll in the supplemental coverage option plan would be 22% of the value of the crop, and the deductible would be 10% of the value for all other producers.

American Soybean Assn. president Danny Murphy said the draft released by the committee "would protect and strengthen crop insurance as well as ensure that a target price program to protect growers from low prices remains decoupled from current planting decisions, thus avoiding the possibility of production distortions. Combined with a revenue protection program similar to that included in last year's Senate bill, the proposed legislation takes significant steps to provide farmers with effective risk management programs while protecting planting flexibility and avoiding planting distortions."

The Supplemental Nutrition Assistance Program (SNAP) remains virtually unchanged from last year's bill in both program and funding, with targeted savings of about $4 billion. The Senate bill closes loopholes and attempts to eliminate fraud and misuse.

The House committee's $20 billion in cuts to SNAP may not be enough to satisfy the more budget-conscious House, but it's more than last year's proposed $14 billion in cuts.

The Conservation Reserve Program acreage cap would be gradually reduced from 30 million acres to 25 million acres due to budget constraints, and the conservation title remains essentially the same from last year's Senate farm bill.

The mark also includes provisions that would establish a cap of $50,000 per farm on all commodity program benefits, except for those associated with the marketing loan program (loan deficiency payments and marketing loan gains), which would be capped at $75,000. Thus, the combined limit would be $125,000, or $250,000 for married couples.

Livestock and disaster programs that expired in 2011 would also be renewed and made retroactive for 2012, a concept supported in both the House and Senate and included in the President's budget proposal.

Volume:85 Issue:19

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