Farm Groups Weigh In on Commodity and Risk Management Programs as Senate Ag Begins Farm Bill Mark-Up
Thursday, April 19th, 2012
In a letter to Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.) and Ranking Member Pat Roberts (R-Kan.) this morning, a group of eight prominent agricultural associations voiced its support for the Senate’s approach to the 2012 Farm Bill, and raised several issues related to commodity and risk management programs.
Co-signed by the American Farm Bureau Federation, American Soybean Association, National Association of Wheat Growers, National Barley Growers Association, National Corn Growers Association, National Sunflower Association, U.S. Canola Association and USA Dry Pea & Lentil Council, the letter commended the committee for adhering to its original proposal of $23 billion in deficit reduction, brought forth to the Joint Select Committee on Deficit Reduction last fall. Additionally, the groups applauded the Committee’s decision not to restructure the federal crop insurance program or to reduce its funding for deficit reduction purposes.
“Even with the clear and real need to reduce our federal deficit, it remains in the best interest of our nation to help ensure a basic level of risk management for farmers and our food supply,” said American Farm Bureau Federation President Bob Stallman. “Farming is a risky business. There is no doubt about that, and crop insurance is a key principle in the goal to provide farmers a dependable safety net.”
“Crop insurance,” stated the groups, “is the core risk management tool used by our producers, and the current program should serve as the foundation for providing additional protection against loss.”
In response to concerns from other commodity groups about a revenue-based approach, the groups advocate making changes in the crop insurance program to enhance its viability as a risk management tool, while maintaining the effectiveness of the existing program for other commodities. The groups do not, however, support program alternatives that tie current-year production to fixed price supports, which can distort planting decisions and production between commodities when market prices decline.
"NCGA strongly believes a farmer should be able to absorb a price or yield loss in any given year," said NCGA President Garry Niemeyer, a corn grower from Auburn, Ill. "However, we are trying to protect farmers, especially young farmers, when they are facing these types of losses multiple years in a row."
In addition to crop insurance, the groups advocated heavily for planting flexibility for farmers. “Our top policy priority for Title 1 in the 2012 Farm Bill is to maintain full planting flexibility and avoid potential planting distortions, so producers are encouraged to follow market signals rather than making planting decisions in anticipation of receiving payments under government programs,” stated the groups. “With the anticipated elimination of direct payments and possible restructuring or elimination of the counter-cyclical program, it is imperative that any alternative program included in the next farm bill be structured in a manner to not distort planting decisions and to provide full planting flexibility.”
“Planting flexibility and limiting planting distortions are musts, not only for soybean farmers, but for farmers in each commodity group,” said ASA President Steve Wellman, a soybean farmer from Syracuse, Neb. “We need policies in place that allow and encourage farmers to plant for the market, and not for the government program. Chairwoman Stabenow and Ranking Member Roberts have done a wonderful job thus far in representing the diverse needs of American agriculture in this farm bill process, and we look for that leadership to continue in what appears to be the home stretch.”
In the letter, the groups also advanced their concept for a new program to complement the risk protection provided under crop insurance. “Our organizations support an approach that partially compensates for current-year revenue losses on a crop-specific basis,” said the groups. “We believe this approach would have an insignificant impact on planting decisions because of the percentage of risk covered. Also, revenue benchmarks would be adjusted annually to reflect recent average commodity prices, and certification of revenue loss would be required.”
“We support this framework that would allow us to continue protect our nation’s crops and livestock farms so they can continue to deliver a safe, secure food supply that supports thousands of jobs along the value chain to our consumers,” added NAWG President and Hallock, Minn.-based wheat farmer Erik Younggren.
Finally, the groups advocated the continuation of the marketing loan program, urging the Committee to oppose any changes in current law regarding payment limitations or eligibility for farm programs based on Adjusted Gross Income. “Currently, 98 percent of U.S. producers participate in the farm program and comply with their conservation requirements,” stated the groups in the letter. “It is important that farmers remain in the program so that our country can maintain conservation compliance on agricultural lands.”
“Both in their various communities and here in Washington, each of our groups has put so much time and effort into crafting a solvent, practical farm bill that works for American farmers,” said NBGA President Scott Brown, a barley grower from Soda Springs, Idaho. “As the House schedules its hearings on the bill, we are encouraged by our progress, and we look forward to continuing our work with both chambers in the interest of farmers nationwide.”