Payment limit removal “undemocratic”

Payment limits included in both versions of the farm bills that passed the U.S. House and Senate have been removed from the conference committee’s final agreement that passed Monday.  Iowa Senator Charles Grassley has pushed hard for payment limit provisions and now has no way to put them back in. Grassley told reporters this morning, “These have all be watered down to the point that they will likely have little or no effect.”

Traci Bruckner with the Center for Rural Affairs agrees with Grassley that the removal is a great disappointment.  She tells Brownfield Ag News, “That provision was written into both bills. It’s completely undemocratic to remove that provision from the process and backroom deal making and it’s going to continue to favor Large wealthy mega-farmers over small and mid-sized family farmers.”

Grassley says the farm bill is written for southern agriculture and will probably have lots of problems with the World Trade Organization (WTO).

AUDIO: Senator Charles Grassley (R-IA) (5:00 mp3)

AUDIO: Traci Bruckner (4:00 mp3)

Congressional Ag Leaders announce farm bill agreement

 

Vilsack: Congress needs to understand what’s at risk

The risks of Congress not passing a farm bill by the September 30th deadline are too many, according to U.S. Ag Secretary Tom Vilsack.

Because of budget constraints and Brazil’s World Trade Organization case against U.S. agriculture, he tells Brownfield, there’s a huge monetary risk, “To the tune of perhaps as much as $840 Million annually because of the WTO case,” says Vilsack.

Passing another 2008 Farm Bill Extension, Vilsack says, also carries risks for its lack of certainty for all farmers, especially dairy and livestock producers, and lack of reforms, which are in the Senate farm bill version, “It risks, I think, the possibility – the real possibility that Congress would basically scoop the money from eliminating direct payments as a price for a one-year extension that would eliminate the ability of future congresses to be able to establish a strong safety net.”

Vilsack says the US House was given a year to agree on a long-term farm bill and it’s not getting another year.  With the Syria issue likely taking up more of Congress’ time this month, Vilsack says they should add more working days to their calendar and get the Farm Bill done.

Interview with Secretary Tom Vilsack (6:00 mp3)

McCaskill on farm bill

While the Senate farm bill that passed this week eliminates direct payments, Missouri Senator Claire McCaskill says behind the scenes there is a push-back from large corporate farms to keep them. She calls it “huge gravy for those big operations” with contractual arrangements that make money off the government even when prices are high.

“It is totally unacceptable in this budget climate and we need to stop it. We are reforming it by putting in a more aggressive crop insurance program, which is still very generous. But, it’s going to save billions and billions of dollars in direct payments. And, frankly, I’ve really not gotten any push-back from the farmers in Missouri about ending the direct payments.”

McCaskill, a Democrat and Republican Missouri Senator Roy Blunt voted for the Farm Bill. McCaskill says the attitude of the House, though, is hard to figure out.

“The parts of my state that really care about this are all represented by Republicans, who are in the majority in the House. And, for the life of me I can’t figure out why they are unwilling to pass a farm bill.”

The House did not take up the farm bill last year but there have been indications from Speaker John Boehner this year that the House will begin debate on a farm bill soon.

House Speaker John Boehner announced this morning he would vote for the farm bill.

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.

USDA to cut $152M from direct payments

Reuters reports that the USDA will cut about 152 million dollars from direct payments to farmers to comply with automatic spending cuts that took effect at the start of this month.

Ag Secretary Tom Vilsack said Tuesday that the cuts would offset reductions due in three USDA programs that have already disbursed money to farmers—the Milk Income Loss Contract, the Supplemental Revenue Assistance program (SURE) and the Noninsured Assistance Program (NAP). 

Vilsack said it is more efficient to pro-rate the direct payment subsidy than to ask the other farmers for a refund on checks already cut.

Ag economist’s projections of direct payments

What’s the projected lifespan of direct payments for farmers? Gary Schnitckey, University of Illinois Professor and Ag Economist, says they are likely going to continue for this year with that extension of the 2008 farm bill.

“As far as direct payments for 20-13, they’re already scheduled. The only thing that can change those payments would be if sequestration (cuts) hit those – and you can guess about that – but it’s more likely that it would reduce the payments rather than end those payments.”

We asked Schnitkey about direct payments for 2014 – especially if a new five-year farm bill is Not passed this year.  He answered, “If we get a Farm Bill Extension like we did for 20-13, it may include direct payments but there’s a good chance they could be reduced as well – or the levels of those reduced or eliminated. So the chance of direct payments for 20-14 is pretty small.”

He says the farm bill drafts of 2013 did not include direct payments so he said it’s pretty certain that IF a farm bill is passed this year it won’t include them either.

AUDIO: Gary Schnitkey on direct payments, ACRE, crop insurance, at the IL Soybean Summit (4:30 mp3)

Farm programs targeted for cuts?

As Congress continues to battle over the budget, a new Democratic proposal to avoid across-the-board spending cuts targets two areas for big cuts; the defense budget and farm programs.  American Farm Bureau farm policy specialist Mary Kay Thatcher says while AFBF favors avoiding sequestration – this is not the way to do it.  “We just don’t think that’s right,” she says.  “We’re willing to give our fair share – but to say only two sectors are going to give all of the money are just unfair.”

Thatcher explains that the plan would cut funding by eliminating direct payments.  But she says that could have happened had the farm bill passed last year.  “Both the bill that passed the House Ag Committee and the Senate eliminated direct payments and did indeed turn part of the money towards deficit reduction and the part of it to build a new program with a new adequate safety net,” she says. 

Parts of the farm bill are designed to protect farmers when times are tough and Thatcher says if too much money is taken out of the budget now – a farm bill can’t be written with an adequate safety net.

Which she adds would be bad news for agriculture.

What could the Farm Bill extension mean for agriculture

Last week’s passing of the extension of the 2008 Farm Bill has the agriculture industry uncertain about where agriculture stands as the new Congress will soon need to begin crafting a new Farm Bill. 

Purdue University Ag Economist Otto Doering provides his thoughts on the future of farm policy.

AUDIO: Otto Doering, Purdue University (3:00mp3)

Rice grower leader on extended direct payments

The rice industry is pleased that direct payments are still available with the extension this year of the 2008 farm bill.

Texas rice grower Linda Ruan, who is chair of the USA Rice producers group (of the USA Rice Federation), says yield is consistent for rice growers because all rice crops are irrigated – therefore, their risk is in price and cost of production.

She tells Brownfield Ag News, “In order to get financed we need some sort of safety net that will – and what we wanted was a counter-cyclical safety net that would not pay anything if prices state up but if prices went down it would trigger – similar to the current counter-cyclical program – it would trigger and give us a payment but only if prices went down.”

And that’s what they liked about the farm bill passed by the House Ag Committee – being able to choose that over revenue protection. The Senate passed farm bill only offer the revenue choice.

Ruan says they are pleased Senator Thad Cochran of Mississippi is the new ranking chair of the Senate Ag Committee, replacing Pat Roberts of Kansas because she says Cochran understands rice and similar southern crops. 

“You know, Senator Roberts, we had worked with him for years, also. But, I think that working with Senator Cochran is going to be, hopefully something that will help move this farm bill forward.”