by Chris Clayton, DTN Ag Policy Editor
WASHINGTON (DTN) — The Senate Agriculture Committee on Thursday passed the 2012 farm bill on a bipartisan vote of 12-5. Four Southern Republicans opposed the bill over what they see as inequitable treatment of rice, cotton and peanuts. One Democrat opposed the bill over cuts to food aid and changes in dairy support.
After sputtering through the week, the Senate Agriculture Committee got the farm bill moving Thursday morning, meeting to consider what Chairwoman Debbie Stabenow called the “Agriculture Reform, Food and Jobs Act of 2012.”
“We examined every program in the farm bill, and we reformed, streamlined and consolidated to get perhaps the most significant reforms in agricultural policy of any farm bill in recent memory,” Stabenow, D-Mich., said in her opening statement.
Stabenow said the bill, which has changed in the past few days, would save $24.7 billion over 10 years under the Congressional Budget Office cost estimate.
In her opening comments, Stabenow acknowledged some of the challenges that caused the markup meeting to be delayed on Wednesday, then rescheduled to Thursday morning.
“Some of our members wanted an individual system; some wanted a county system — so we are giving farmers flexibility to decide what’s the best for their farm and the risks they face,” she said.
Further, Stabenow noted that the bill, with a $50,000 payment cap on the commodity program, would have “the tightest payment limits ever,” she said.
Sen. Pat Roberts, R-Kan., ranking member of the committee, called the bill a bipartisan effort. Roberts said the bill is not the best possible outcome, but it is the best bill possible under the circumstances facing Congress with the federal budget.
“I am proud to say we have put together a bipartisan bill that strengthens and preserves the safety net for farmers,” Roberts said.
Still, the bill has detractors on the committee. Sen. Saxby Chambliss, R-Ga., ripped the bill, saying commodity programs cannot be “one-size-fits-all” given regional cropping differences. Further, Chambliss said the bill shifts money from Southern crops to aid commodities grown in other regions. The bill “is neither compatible or fair,” Chambliss said.
By squeezing all commodities into one program, it will create planting distortions and shifts in crop production, Chambliss said. He added that the bill has only a 10{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} band of revenue protection and will not help farmers if prices collapse.
Sen. John Boozman, R-Ark., also criticized the changes in the commodity title, noting that rice producers show a 70{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} reduction in the 10-year projected subsidy payments for rice.
Under the bill, direct payments will be repealed for all crops except “pulse crops” such as chickpeas and lentils.
The bill considered by the committee on Thursday also lowered the adjusted gross income eligibility to $750,000. Moreover, the bill makes major changes to language involving “actively engaged” to further restrict who is eligible for payments.
There will be a study to determine the feasibility of whether popcorn should be considered a commodity crop.
The manager’s amendment also re-establishes upland cotton as eligible for the Agriculture Risk Coverage program.
The bill sticks with the “Agriculture Risk Coverage” program language crafted for the supercommittee last fall. Farmers would have to make a one-time choice between enrolling for individual coverage or countywide coverage under ARC.
ARC would largely be considered a supplement to crop insurance as much of the safety net shifts to a risk-based system requiring insurance coverage for farmers to protect themselves against catastrophic losses.
For a farmer signing up for individual coverage, the crop revenue will be compared to a five-year average individual yield for that commodity on the producer’s farm. In an Olympic average, the high and low years are excluded.
Those averages would then be matched with either the national marketing price average for the most recent 10 years for a commodity or the marketing-loan rate, whichever is higher. The 10-year national price average only applies to the individual coverage and is a change from the bill language released last week.
In a concession to rice and peanut producers, senators also created a target price in ARC specifically for rice and peanuts at $13 cwt for both long and medium-grain rice, and $530 a ton for peanuts.
Once the payment rate is determined, the rate is multiplied by 65{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of eligible acres for the commodity. For prevented planting, a 45{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} calculation will be factored.
Farmers who take the county option would have their crop revenue compared to the Olympic five-year county average yield. The eligible acres covered would rise to 80{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} for planted acres and remain at 45{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} for prevented acres.
Changes in the manager’s amendment bumped the eligible-acreage coverage for both the individual and county coverage.
Further, the manager’s amendment allows separate calculations for irrigated and non-irrigated sunflower seeds, barley and wheat.
Under county coverage, all acres planted or prevented from being planted would be covered on a farm. However, for most farmers the total acreage would not exceed total acres a farmer had for the years 2009 through the 2012 crop year. There would be an opportunity to add acres, such as when land comes out of the Conservation Reserve Program.
The bill keeps marketing loans, but does not change the marketing-loan rates now being used. The bill does have special marketing-loan provisions that include upland cotton and rice.
The full legislation and proposed changes can be found at http://www.ag.senate.gov/…
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
Posted with DTN Permission by Haylie Shipp
