Lucas: Target prices a national issue, markup likely in June
May 09, 2012 | 10:44 AM
Rep. Frank Lucas, R-Okla.
By JERRY HAGSTROM
House Agriculture Committee Chairman Frank Lucas, R-Okla., said Tuesday he believes that all crops need a farm program that protects them from multiyear price drops, a position with which House Agriculture ranking member Collin Peterson, D-Minn., agrees.
In a wide-ranging exclusive interview with The Hagstrom Report, Lucas praised Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., for her “herculean efforts” to get a bill through committee, and said that he would not underestimate her ability to convince Senate Majority Leader Harry Reid, D-Nev., to provide time on the Senate floor to debate the bill.
But Lucas said that the Senate bill’s “shallow loss” revenue program that would cover some losses beyond crop insurance is “a great tool” in good times when prices are high, but would not provide a proper safety if prices plummet.
Because payments under the shallow loss program would depend on revenue comparisons that would gradually go down under such circumstances, “there would be “a free fall to the bottom,” he said. On the other hand, target prices written into the bill would trigger payments whenever prices reached a certain level.
“You write a farm bill for the bad times,” Lucas said.
The bill that Stabenow, Lucas, Peterson and Senate Agriculture Committee ranking member Pat Roberts, R-Kan., sent to the supercommittee in charge of deficit reduction in December gave farmers a choice between the shallow loss program and a target price-based program, but Stabenow and Roberts left it out of the Senate package.
Lucas said he intends to include both the shallow loss program and the target price program in the House bill, and that he believes farmers throughout the country will be interested in it. Lucas said it is incorrect to view him as simply going along with southerners who have said the bill that the Senate Agriculture Committee passed does not treat rice and peanuts fairly.
Oklahoma does not grow rice, but it grows a lot of wheat, and Oklahoma wheat growers have told him repeatedly they need protection against the effects of several years of price declines.
“I am the chairman of the House Agriculture Committee,” he said. “I represent the whole country.”
Rep. Collin Peterson, D-Minn.
Peterson said in a separate interview that he also believes that the target prices and countercyclical program should be continued.
"Crop insurance looks like a really big deal, but if prices go down ... you're going to be insuring yourself for a loss," Peterson said. "I do not see crop insurance as a safety net."
Growers of minor oilseeds, pulse crops and barley have said that the target prices for major crops such as corn, soybeans and wheat would mean that farmers would choose to produce those crops rather than continue the rotation.
But Lucas said he has asked those growers to “show me your data” to prove that farmers will switch crops, and that he has also asked commodity group leaders to advise him and his staff on the appropriate target price for each crop.
To the argument that target prices would interfere with market forces, Lucas noted that corn acreage has gone up since the Renewable Fuel Standard was instituted. “That didn’t have anything to do with target prices,” he said.
Lucas also confirmed that his staff has developed a chart that shows what percentage of farm program payments each state will lose under the Senate bill. Congressional aides and lobbyists have said the chart shows that states outside the major corn and soybean producing states lose more. Lucas declined to release the chart at this time, but said he would make it available when the numbers are perfected.
Lucas also said he believes the House version of the bill will cut close to the $33 billion over 10 years that President Barack Obama has proposed. He said he is comfortable with the other titles of the farm bill, but that the House will insist on a bigger cut to food stamps than the Senate bill’s $4 billion.
The House bill may contain a slightly different cotton program from the one in the Senate bill, he said. Lucas declined to provide details of what the House bill might do differently for rice and peanuts, but noted that he wants sorghum treated properly because it is a crop that requires less water than most crops and has a lot of potential.
He also said that he preferred the payment limitation provisions that were in the December agreement to the tighter ones that were included in the Senate bill. Peterson said he is concerned farmers are going to take too much fragile land out of the land-idling Conservation Reserve Program as prices rise, and put it back into production.
Oklahoma has a lot of land in CRP, and farmers who have received the direct payments no matter what they plant and whether prices are high or low have put their land into grass. Lucas said he believes there will be discussion of a sodbuster provision in the farm bill to discourage farmers from planting the most fragile land.
He further said “I’m not inclined to put restrictions in.”
But Lucas also said Congress needs to use the budgetary credit it gets for reducing the size of the CRP.
On the scheduling of the bill, Lucas noted that his committee’s final subcommittee hearings will be held next week, and an aide said the committee expects to go to markup in June. Lucas noted that the Senate might take up the farm bill on the floor before his committee proceeds to markup.
Lucas said he hopes House Speaker John Boehner, R-Ohio, will allow the bill to proceed to the floor on a modified rule, but said the committee will have to pass a bill before Boehner makes that decision. He also said he wonders how the House leadership will react if 200 or 300 amendments are filed on the bill.
Peterson said this week that he has become very optimistic that Congress can finish the farm bill this year.
"I can see the pathway of how we can get there if they can get the bill up on the Senate floor," he said.
Lucas said he shares Peterson's optimism. “I always expect to make a crop when I put seed in the ground,” he said.
Sending the bill to Obama before the election “would be a wonderful thing,” he concluded.