Archive for May, 2012

Farm Bill Forthcoming

May 2, 2012

The latter half of April breathed new life into the Farm Bill after the Senate Agriculture Committee recently passed legislation to authorize new farm programs for the next five years while reducing our federal deficit $23 billion. The bill now resides with the full Senate and awaits a possible vote and amendments.

But don’t get too excited. This will be a long and treacherous road.

Some of the leadership members in the House of Representatives have already voiced their objections to the Senate’s version of the Farm Bill and are drafting their own version, with reported reductions of at least $33 billion. The House and Senate will eventually have to merge their separate proposals to implement new farm legislation before the expiration of the current bill September 30, or they will be faced with the proposition of some sort of extension of current law.

Essentially, the Senate bill eliminates direct payments (subsidies to farmers based on historical production without regard to current prices or yields) and focuses on protecting and enhancing the current crop insurance program while coupling that with a new revenue program named the Agriculture Risk Coverage (ARC). While scrutiny remains, thankfully, crop insurance currently continues to be recognized as one the most accepted forms of public-policy support for commodity crop farmers because of the positive role the program has played to provide a sound risk-management tool for the farm.
Inevitably, one of the challenges of passing a Farm Bill is rooted in regional differences. A news story explained the challenge well — “Farm politics are more regional than partisan.” There’s a need to balance the interests of different geographic regions and commodities fairly.

Some of the more traditional Southern crop industries and their representatives have commented that protections for their products — chiefly rice, cotton and peanuts — are being reduced drastically compared to some of their Midwestern counterparts like corn, soybeans and wheat.  While we certainly have a very different viewpoint, we must acknowledge that these concerns exist if we are to move a positive and worthwhile Farm Bill in the near future.

Major Features (Farm Bill Markup Summary)

  • Eliminates direct payments to save $5 billion.
  • Savings would be invested in a new revenue insurance program (ARC) designed to complement crop insurance and protect farmers against multi-year losses caused by low prices or poor yields. Crop insurance would continue to be the tool used to protect against larger losses.
  • Payments would be capped at $50,000 per person or $100,000 for married couples.
  • Enforces stricter requirements that payment recipients be “actively engaged” in farming operations.

Congressional deadlock might threaten the September deadline, but there’s still the strong potential and hope to move legislation forward after witnessing the Senate Ag Committee come together in a bipartisan manner to find common ground for this important piece of legislation.

Another news author reminds us of the significance of this vital bill:

“There are many reasons public support for agriculture is critical to rural economies, to the security and stability of our nation’s food supply and to the American public. The point isn’t to argue that support should be eliminated or even reduced; with 2 percent of the nation’s population producing all of the food, society has a strong interest in providing a safety net for this tiny minority.”

OCWGA will continue to be engaged throughout the Farm Bill process and will update our members about its advancements.

We welcome your questions/comments about or related to our work to support and advance the Ohio grain industry. If you’re interested in joining OCWGA, please contact us.