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Stabenow raises north-south equity issue

In an appearance on the Diane Rehm Show today, Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., raised an issue that has permeated behind-the-scenes farm bill negotiations, but that other participants in the debate have avoided mentioning in public: the longtime view among northern farmers that southerners have gotten more than their fair share of farm subsidies over the decades.

In a discussion of the commodity title on the National Public Radio show, Stabenow noted that she believes the Senate bill’s farm program based on providing payments to farmers when their revenues go down rather than payments triggered by target prices is more market-oriented.

When asked about southerners’ complaints that the revenue program won’t work for rice and peanuts, Stabenow said, “A lot of folks would argue they’ve gotten more back than their percentage of the baseline.”

A Stabenow spokesman said that Stabenow was referring to the fact that “folks would argue that some crops receive a greater share of the payments than their share of production.”

Southern farmers have long argued that the reason their subsidy rates are higher is that the cost of production for cotton, rice and peanuts is higher is than for northern crops such as wheat and corn. The southerners have also argued in favor of looser payment limitations because their farms tend to be larger.

Northern farmers have accepted those arguments to a degree, but also contend that the high payments to southern farmers have been partly an exercise in raw political power that northern legislators have had to accept in order to get the farm bill passed.

That exercise became tougher this year because Sen. Blanche Lincoln, D-Ark., who chaired the committee, was defeated in 2010, and Stabenow assumed the chairmanship. Meanwhile, Sen. Saxby Chambliss, R-Ga., who had been ranking member of the committee, moved to ranking member on Intelligence and Sen. Pat Roberts, R-Kan., took over the ranking member position.

The issue of differences in payments has become particularly important this year because the direct payments program that is being eliminated was calculated from payments farmers received in the 1980s for the crops they grew at that time. Under the direct payments program, farmers have been getting payments based on what they grew long ago even if they have shifted from cotton and wheat, for example, to corn and soybeans or other crops. The base for the new program is planted acres and prevented planted acres of currently grown crops.

The issue of fairness is not entirely north vs. south, however. While corn and soybeans have gotten payments that are less than their share of the baseline and cotton, rice and peanuts have gotten a higher share, wheat, which is mostly a northern crop, has also gotten more than its share of payments, according to a Congressional Budget Office chart for 2008.

Chart


It’s unclear whether the target price and countercyclical program that the southerners say is their preference over a revenue program would guarantee them higher payments or whether, as they argue, it would be a sounder basis for a farm program because they would assure that the value of the program would not diminish if prices declined over a multiyear period.

Senate Budget Committee Chairman Kent Conrad, D-N.D., Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. John Hoeven, D-N.D., included a target price and countercyclical program in their farm bill proposal, but they have not objected to the Senate farm bill moving forward without including it. While the American Farm Bureau Federation opposes target prices, the National Farmers Union favors them

Stabenow said she is continuing to negotiate with the southerners and that she and House Agriculture Committee Chairman Frank Lucas, R-Okla., are “good friends” and noted that they worked together on the proposal that went to the supercommittee. That proposal included a target price and countercyclical option, which Lucas has said he intends to include in the House bill he expects to mark up in committee in June. “We’ll end up compromising,” Stabenow said today about her relationship with Lucas and the Senate and House bills.

House Agriculture General Farm Commodities and Risk Management Subcommittee Chairman Michael Conaway, R-Texas, said on the Diane Rehm show that the House bill “will make the safety net fair across regions.”

Conaway also noted that he voted in committee for the House budget proposal that would cut $35 billion over 10 years from food stamps, but said he does not know how much the Agriculture committee would propose cutting in a new farm bill.