The Hagstrom Report

Agriculture News As It Happens


Senate Ag Committee 'moving forward' after final farm bill hearing, Stabenow says


Following a final hearing today on the next farm bill, Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., said she will hold a markup on the bill “as soon as possible,” while the National Association of Wheat Growers called for passage of the bill before Sept. 30.

“We would love it if everyone at this table would come together, but we are moving forward,” Stabenow said as a wide array of farm leaders presented their proposals.

After the hearing Stabenow noted to reporters that various dates in April and May have been suggested as deadlines, but that she would not predict a specific date at this time. Both Stabenow and Senate Agriculture Committee ranking member Pat Roberts, R-Kan., have said they want the markup substantially before Memorial Day.
Erik Younggren

Erik Younggren
Most of the farm leaders called for passage of the bill this calendar year, but National Association of Wheat Growers President Erik Younggren, a Minnesota farmer, called on Congress to approve a new farm bill before the 2008 bill expires on Sept. 30.

“This will provide reliability for the nation’s food supply as our wheat farmers go to the fields this fall to plant the 2013 crop,” Younggren testified.

Agriculture Undersecretary for Farm and Foreign Agricultural Services Michael Scuse also testified that the Obama administration wants a bill this year.

“To go into next year without a farm bill, without any certainty, would have a huge negative impact and [place] a huge burden on the farmers of the United States,” Scuse said. Lack of certainty, he added, would affect what crops are planted, when crops are marketed and what crops are planted on certain acreage.

The committee is expected to use the draft proposal that agriculture committee leaders sent to the failed Joint Committee on Deficit Reduction in December as the basis for the bill, but Roberts noted that he had “a lot of concerns” with that bill.

Roberts has said on numerous occasions that he opposes the bill’s higher target prices to trigger farm payments.

The hearing focused on risk management and commodity programs and gave general farm groups, commodity organizations and the crop insurance industry an opportunity to present formally to the committee the proposals that they have been circulating for several months.

The farmers and other industry leaders brought out the differences among the specific commodity groups and regions that have been apparent all year, as they have tried to come to terms with the fact that the direct payments program is too unpopular with the general public to continue, and that Congress will need to rewrite the farm program with a smaller budget than in the past.
Bob Stallman

Bob Stallman
The only farm leader to display any change of position was American Farm Bureau Federation President Bob Stallman, who testified that his board had voted last week to “evaluate middle-ground alternatives” to the catastrophic loss program it has proposed.

Stallman acknowledged that the Farm Bureau proposal has been considered “revolutionary” and that the slowness the Congressional Budget Office has demonstrated in scoring the proposal made the board decide to be open to other concepts.

But Stallman stressed to reporters afterward that the Farm Bureau board still believes that the group’s proposal for the creation of a program to make payments to farmers when their losses are the greatest would be the best. If the bill does not move quickly and the Congress decides to cut more from the farm program than the $23 billion over 10 years that has been discussed so far, Stallman said, he believes that the Farm Bureau proposal will gain greater traction.

Stallman also said he believes the House will insist on a bigger cut to the farm program.

“The elements of the Republican Party that control the House won’t accept only $23 billion,” he said.
Roger Johnson

Roger Johnson
National Farmers Union President Roger Johnson also presented a proposal for a commodity program that has not been seriously considered so far.

The NFU program, developed by Daryll Ray, a professor at the University of Tennessee, would attempt to moderate income volatility by re-establishing a farmer-owned reserve, although Johnson stressed that it would be different from the farmer reserve years ago because the government would not own the grain.

Johnson said in an interview that his group has also been involved in the development of the “shallow loss” program because “that is essentially the vehicle through which permanent disaster program would be structured.” The shallow loss program is favored by the National Corn Growers Association and was introduced by Sen. Sherrod Brown, D-Ohio, and Sen. John Thune, D-S.D.

Johnson said, however, that Farmers Union and Senate Budget Committee Chairman Kent Conrad, D-N.D., remain concerned about that proposal’s use of crop data on wide areas such as crop reporting districts to trigger payments, because they fear that anything but a single farm trigger will make the calculation of accurate payments in the Northern Plains difficult.

Pam Johnson, an Iowa grower who represented the National Corn Growers Association, said that lowering the payment determination to the farm level would further increase costs.

But Roger Johnson said that making payments to all farmers in an area that experienced a weather-related event would mean that some farmers would get payments even if they did not experience losses.

“What is the public going to say about that?” he asked.

All the farm leaders and a panel of crop insurance leaders testified that crop insurance is now the core of the farm program, but several farm leaders also said that another program is needed to address losses that crop insurance does not cover.

Thune raised the issue of whether increasing crop insurance would make the program, which already costs $9 to $10 billion per year, a target for critics. Roberts pointed out that the budget for crop insurance has already been cut.

The development of that other program or more likely programs will be at the core of the committee’s deliberations in the coming weeks, and both the commodity leaders and the committee members displayed the regional differences over the issues. While corn, soybean and wheat leaders said they are worried that higher target prices could interfere with planting decisions, rice and peanut growers called for higher target prices, saying that traditional crop insurance has not worked for them.

Sen. Saxby Chambliss, R-Ga., asked Younggren, the wheat leader, whether a higher target price would make the target price “more effective” as a safety net program. Younggren replied that he would be concerned about affecting planting decisions.

“But would it make it more effective?” Chambliss asked.

“Yes, it would make it more effective,” Younggren replied.