Farmers will have to choose between a commodity program based on their individual farm or one that factors in countywide yield and income.
Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., on Friday released a 900-page “chairman’s mark” of the farm bill for the full committee to debate or amend. The committee is set to meet on Wednesday to consider the legislation.
The Senate bill is expected to save $23 billion over 10 years compared to the baseline spending on the current farm and food programs. Stabenow’s bill would eliminate direct and counter-cyclical payments, as well as the Average Crop Revenue Election program, or ACRE. Lawmakers were pushing for farm-program changes that would score at least $15 billion in budget savings over 10 years.
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. The bill language also says that ARC would have a $50,000-a-year payment cap.
Moreover, with the elimination of the counter-cyclical program, the bill has no language creating any new target price program. That battle appears to have been won by farm groups that opposed any optional program to raise target prices.
For a farmer signing up for individual coverage, the crop revenue will be compared to the Olympic 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 an Olympic five-year national marketing price for a commodity or the marketing-loan rate, whichever is higher.
Once the payment rate is determined, the rate is multiplied by 60{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 75{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} for planted acres and remain at 45{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} for prevented acres.
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.
Reaction was slow Friday from most commodity and general farm organizations. With the commodity and insurance titles being contentious, Senate staffers did not brief farm organizations on the full bill until its release Friday afternoon.
The American Soybean Association was among the earliest groups to announce support for the overall bill. “ASA leadership is reviewing the details and implications of the 900-page chair’s mark, and we will be prepared to comment further early next week,” said ASA President Steve Wellman, a Nebraska farmer. “At this point, we are very pleased to see that the proposal includes a revenue-based risk management program that will complement the federal crop insurance program. We also applaud leadership’s decision not to cut crop insurance funding to achieve the Committee’s deficit reduction objectives.”
Agriculture Secretary Tom Vilsack also credited Stabenow and Senate Ag Ranking Member Pat Roberts, R-Kan., for working together in a bipartisan fashion on the bill. “While we still need to review all of the policies, reforms and investments proposed in this bill, I am optimistic that members of Congress will work to pass legislation that will support farmers, guarantee a safe, affordable, and nutritious food supply, support nutrition programs that help millions of families put food on the table, and help create jobs for the American people,” Vilsack said.
CONSERVATION COMPLIANCE
While compliance language remains tied to both the ARC program and marketing loans, there is no language in the bill tying it to crop insurance.
The Environmental Working Group offered criticism of the bill, stating the bill would sacrifice conservation and food-aid programs to protect the insurance industry and create a new commodity program.
“EWG is disappointed that the Committee failed to address the impact of fence-row to fence-row agricultural production, which is putting unprecedented pressure on our land, water and wildlife,” said Craig Cox, senior vice president for agriculture and natural resources at EWG. “Although the Committee extended conservation compliance to the revenue guarantee program, we are disappointed that the Committee failed to require that farmers protect wetlands, grasslands and soil health in exchange for insurance subsidies.”
COTTON
Despite complaints from Brazil, the bill includes the Stacked Income Protection Plan for upland cotton farmers, which will become the backbone of the safety net for cotton. The plan would allow up to 90{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} protected coverage on revenue.
CONSERVATION
The bill would ratchet down the Conservation Reserve Program by lowering the acreage cap from the current 32 million acres to 25 ma in 2017. The Senate Ag Committee stated the bill would also consolidate the current 23 conservation program down to 13 programs.
The Conservation Stewardship Program would enroll up to 10.3 ma a year with an average payment rate of $18 an acre. A producer would have a $200,000 payment cap for all contracts under CSP.
DAIRY REFORM
The National Milk Producers Federation released a statement citing that key components of its proposal had been included in the dairy title. The bill would create a margin insurance program for dairy to deal with either low milk prices or high feed costs. Dairy farmers also will be allowed to enroll in a market stabilization program that would require them to cap their milk output during low prices.
INCOME CAPS
The bill would set a three-year average income cap of $900,000 adjusted gross income to remain eligible for farm programs.
NUTRITION
The bill changes controversial ties between low-income heating assistance and benefits under the Supplemental Nutrition Assistance Program. Further, there are provisions to disqualify lottery and gambling winners from receiving benefits. College students would also be disqualified from receiving SNAP.
ENERGY
The Rural Energy for America Program is included with a $20-million-a-year cap on funding. The Biomass Crop Assistance Program also is included at $20 million a year.
Source: DTN
Posted by Northern Ag Network
