Five-year Farm Bill is a necessity

The full Senate began debate on the Farm Bill earlier this week.  Indiana Senator Joe Donnelly says it is moving along well.  “It has momentum,” he says.  “We had a strong vote coming out of the committee itself so I’m looking for a five-year farm bill.”

Yesterday the Senate voted on the amount of cuts to the nutrition programs.  “There were some amendments to take cuts out of crop insurance instead,” he says. “You know what on the nutrition cuts – we’re working really hard make sure those cuts are ones that are sensible, that won’t eliminate any nutrition for our children and others.  But at the same time, we have to make sure we have crop insurance.”

Donnelly tells Brownfield he’s thinks this Farm Bill will be good for Indiana’s farmers.  “We were able to work through what we call Farm Flex, which provides planting flexibility for all of our farmers,” he says.  “I kind of held the line on that and said, ‘look we have to make sure this program continues’ so we were able to keep that in place.”

He thinks a vote on the Farm Bill is not too far away.  “I’d like to tell you today – but you never know,” he says.  “We’re ready to go.  We’re ready to move forward and I’m hoping to have a vote here really soon.”

AUDIO: Senator Joe Donnelly, Farm Bill (3:50mp3)

Iowa ag leader: Crop insurance criticism is ‘unwarranted’

The president of Iowa Farm Bureau, Craig Hill, says criticism of the federal crop insurance program is “unwarranted”.

“I don’t think it’s overly-subsidized.  I think it’s properly managed,” says Hill. “In the case of Iowa farmers, we think it’s done about right.”

Hill shared his thoughts on crop insurance in an interview recorded earlier this week with Brownfield’s Ken Anderson.

AUDIO: Craig Hill (5:20 MP3)

Conservation compliance compromise

A white paper, developed by a number of agricultural, environmental and conservation groups outlining recommendations linking crop insurance premiums to conservation compliance has been sent to Senate Agriculture Committee leadership.

Earl Garber of Louisiana, President of the National Association of Conservation Districts (NACD) says the non-partisan agreement addressed some of the NACD concerns.

“Conservation in relation to crop insurance premiums has to be considered differently than conservation compliance as applied to sodbuster and swamp buster,” Garber said. “And I think this is what this white paper did, it addressed those concerns we had.”

Based just on the number of groups coming together, Garber calls the compromise quite an accomplishment and something NACD members should take seriously and understand the work involved.

“Just have to realize there’s been a lot of effort here, so let’s not be critical, let’s be somewhat positive about it, let’s continue to bring this to the table,” said the NACD President. “Hopefully it will be part of the Farm Bill and it will be a complete bipartisan and partner type effort when it’s all said and done.”

In the interest of completing a 2013 Farm Bill and by agreeing to the compromise, the groups are committed to not support amendments that might weaken the crop insurance program or amendments that might not link conservation compliance with crop insurance premiums.

Audio: Earl Garber, President, NACD (4:20 mp3)

Economist: Cut insurance subsidies

Iowa State University economics professor Bruce Babcock says it’s time to ask farmers to pay more for crop insurance.

Babcock says generous federal subsidies of crop insurance encourage farmers to buy high levels of coverage and ultimately drive up the cost to taxpayers.

“The premium subsidies incentivize farmers to buy Cadillac coverage,” Babcock says. “The Cadillac coverage increases the indemnities paid out. Taxpayers are paying three-quarters of those indemnities, so the subsidies have a direct impact on taxpayer costs because taxpayers are paying for part of that premium — but they inflate the overall indemnities and taxpayers pay the lion share of those in high-loss years.”

Babcock says he is not being critical of the crop insurance program itself as a security net for farmers.

“I’m a critic of the subsidies, and those two are two separate items,” Babcock says, ”and I just think that you could cut the subsidies a tremendous amount — or restructure them — save tens of billions of dollars over ten years and still provide a high-quality assurance safety net.

“If that’s what Congress wants, you could do it at a far lower cost.”

Babcock says crop insurance has become more of a farm income support program than a risk-management program.

Babcock has released a new report on crop insurance. He made his comments Wednesday during a media conference call set up by the Environmental Working Group

Radio Iowa contributed to this story.

Mounting pressure to cut crop insurance subsidies

President Obama has proposed cuts to the federal crop insurance subsidy and there seems to be growing sentiment in Congress to do the same.

During his weekly conference call with ag reporters Tuesday, we asked Iowa Senator and Senate Ag Committee member Chuck Grassley if he thinks those efforts will be successful and where he stands on the issue. 

AUDIO: Chuck Grassley (1:26 MP3)

Crop insurance indemnities nearly $17 Billion

The USDA’s latest report on crop insurance indemnities shows they have risen to a record high of nearly $17 Billion for the 2012 crop year.

The Des Moines Register reports the number is $700 million higher than the week before. The 2012 drought affected the Corn Belt and beyond – covering more than 60-percent of the contiguous U.S.

USDA working on crop insurance fraud

At a budget hearing on Capitol Hill Tuesday, some of the members of the House Agriculture Appropriations Subcommittee pressed Ag Secretary Tom Vilsack about waste, fraud, abuse and errors in his department’s programs—particularly the nutrition programs such as SNAP.

Vilsack said he is just as concerned as they are and he’s boosting efforts to root out fraud and abuse in the SNAP program.  But he said it’s not just the integrity of SNAP that’s being worked on.

“There’s also an issue we’re taking very seriously on crop insurance—because the percentage of error and fraud rate is higher in crop insurance than it is in SNAP,” Vilsack said. ““Obviously those programs are different in terms of size—but even if you reduce the error rate in crop insurance, you’re talking about tens of millions, and potentially hundreds of millions of dollars in savings as well. 

“So it’s incumbent on us to continue to be focused on integrity.”

Vilsack said that’s why he’s requesting more money in next year’s USDA budget for program evaluations, reviews, investigations and enforcement.

Concerns over crop insurance, food aid

Proposed cuts to crop insurance and a restructuring of the nation’s food aid programs are drawing criticism from the American Soybean Association (ASA) and state soybean groups.

Those proposals were part of President Obama’s budget proposal for 2014, released last week.  It includes a seven-point-four billion dollar reduction in the federal crop insurance program. 

Carol Balvanz of the Iowa Soybean Association

Carol Balvanz of the Iowa Soybean Association

But the policy director for the Iowa Soybean Association, Carol Balvanz, says it’s the wrong place to look for savings.

“Crop insurance paid out this past year, but it hasn’t always—and if you back the last ten years, farmers have more than paid their fair share,” says Balvanz. “So making cuts to this just because it’s a good place to gather a couple percentage points of money does not seem to be wise planning.”

In addition to the proposed cuts to crop insurance, ASA reiterated its strong opposition to a proposed restructuring of the nation’s international food aid programs.

The proposed change would replace in-kind aid with cash vouchers for purchases of food aid from foreign suppliers instead of commodities grown by American farmers.  But Iowa Soybean’s Balvanz says simply giving cash to foreign countries is a risky proposition.

“Cash is very fungible—it’s very usable for things other than food,” she says, “and many of the countries where our products end up are so poor that I’m not sure they have the infrastructure in place to assure that that money would actually go for either food production in that country or to buy food for the poorest people.”

However, ASA points out there were also positives in the President’s budget. Several of ASA’s top priorities were reflected in the proposal, including both agricultural research and infrastructure.

AUDIO: Carol Balvanz (2:09 MP3)

Obama’s budget has big ag subsidy cut

The Obama administration proposes big cuts to farm subsidies over 10 years in its latest budget, released today.  DTN says the proposal would eliminate 37.8 Billion dollars in farm subsidies, eliminating the direct payment subsidy program and reducing crop insurance subsidies.

In its proposal, the administration says the all-time high values of crop and livestock production no longer justify income support payments.

The Senate-passed farm bill last year eliminated direct payments – no vote was taken on a farm bill in the House.

The administration says net farm income is forecast to rise nearly 14% this year to more than $128 Billion – “the highest inflation-adjusted amount in 40 years.”  Strong opposition from ag-state lawmakers and farm groups is expected -– last year the Senate voted to INCREASE spending on crop insurance by more than 2.5 Billion dollars over 10 years.

Roberts’ bill strengthens crop insurance

Senator Pat Roberts of Kansas has introduced a bill that he says would save more than 5-Billion-dollars over five years while strengthening federal crop insurance that he wants to be a part of a new farm bill. The measure, he says, is paid for by eliminating all direct payments to farmers.

Roberts says farmers in Kansas and elsewhere were able to get back on their feet after three years of serious drought, not because of an ad hoc disaster package but “because they managed their risk and protected their operations through the purchase of crop insurance.”

Among its features, he says the bill addresses the declining Actual Production History (APH) yield problem by increasing the county transitional yield. The measure is similar to the Senate-passed farm bill from last year.  Roberts and former Senator Bob Kerry of Nebraska authored legislation 13 years ago that was signed into law improving the crop insurance program.