The Hagstrom Report

Agriculture News As It Happens


NFU would support planted acres compromise

MINOT, N.D. — The National Farmers Union would support a compromise on the issue of making farm payments on current planted acres or farmers’ historic base, National Farmers Union President Roger Johnson said in an interview here where he was attending the North Dakota Farmers Union convention.

Johnson, a Democrat, is a former North Dakota elected agriculture commissioner.

Speaking of the proposal by the corn, soy and canola growers last week to use a rolling average of recent plantings, Johnson said that Farmers Union could support that but “a number of different ideas” have been proposed to farm bill conferees and are under consideration.

“There are half a dozen variations on the different formulas,” Johnson said. “Any one of them are formulas we would be open to as long as it provides help when prices go to pot and goes away when the market is high.”

Farmers Union favors the House commodity proposal that would make payments based on target prices.

Johnson said his organization cannot support the Agricultural Risk Coverage proposal in the Senate farm bill because the level of benefits will fall if there are several years of low prices. Advocates of the ARC proposal, he explained, say that as crop prices go down, farmers’ costs will go down. But Johnson said it has been his experience that rents and the costs of inputs such as fertilizer and chemicals go down much more slowly than the prices that farmers get.

“Those folks that sell those things don’t look at cost of production, they look at what the market will bear,” Johnson said. “But on the way down they fall at a slower rate.”

If there is not a strong countercyclical program, that will also affect land prices and farmers’ balance sheets, he said.

Corn and soybean growers have favored basing countercyclical farm payments on farmers’ base acreage, and they and several northern senators have said they fear making payments on current plantings could encourage a World Trade Organization case against the U.S. farm program with charges that it distorts planting away from what markets signal.

The Senate farm bill uses historic base acres in its calculations.

But House Agriculture Committee Chairman Frank Lucas, R-Okla., and other southern Republicans have favored moving to current plantings on the grounds that the base acreage program based on acreage in 1985 is way out of date and hard to defend to the public. The House bill is based on current planted acres up to base.

Johnson said Farmers Union supports the “concept” of the rolling average of recent years’ acres, but that he believed the House Agriculture Committee’s modeling of that proposal had shown unintended consequences for crop rotations.

He said that Farmers Union has not done its own modeling.

Johnson noted that the WTO has not ruled on the House proposal, but that the rolling average proposal “has a better chance of being found compliant” and makes it less likely there would be a WTO challenge.

Johnson said he was optimistic about the farm bill passing, and said he has “a great deal of admiration” for Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., for her willingness “to consider a lot of different ideas. She has not been tied to ideology.”

“We will still get a bill and there is a strong likelihood it will happen by the end of the year,” Johnson said.