The Hagstrom Report

Agriculture News As It Happens


Senate, House Ag leaders spar over farm bill


Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., and Pat Roberts, R-Kan., held a news conference today to announce they are ready for the farm bill to move to the Senate floor, while a House Agriculture subcommittee hearing today turned into an opportunity for members of Congress, economists and farm leaders to evaluate the Senate Ag Committee-passed bill.

Senate Majority Leader Harry Reid, D-Nev., has not announced a schedule for floor debate, but 45 senators sent Reid and Senate Minority Leader Mitch McConnell, R-Ky., letters this week urging them to bring up the bill. Only two southern senators signed the letter, however.

Stabenow noted that the committee has not yet received a final score on the cost of the bill from the Congressional Budget Office and said she was confident of defeating an expected attempt to limit crop insurance payments.

Stabenow said, “This is real reform…it is fair for every crop,” according to a Reuters report. "We know there are some differences," said added in a reference to the House approach. "I'm confident ... we can put this together."

Michael Conaway, R-Tex., House Ag Committee General Farm Commodities and Risk Management subcommittee chairman, opened his hearing with a scathing critique of the Senate bill.

“I do not believe that our counterparts in the Senate have made passing a farm bill this year any easier,” Conaway said in opening prepared remarks.

“The Senate bill undermines crop insurance by setting up a revenue program that competes with and duplicates crop insurance,” Conaway added. “In fact, CBO indicates that the budget for crop insurance declines by about $2.4 billion as producers reduce the coverage they now buy in favor of free coverage.

“Plus, when you leave out money carried over from the commodity title to crop insurance to pay for STAX [the new cotton program], the net cut to crop insurance is over $700 million,” said Conaway. “Crop insurance is also taking a drubbing in the press as editorial boards and everyone else confuses successful crop insurance with the Senate’s new revenue program.
“To be clear, I am not opposed to a farm policy that helps producers cover a portion of their deductibles, which can be very high,” he said. “But I am convinced the Senate’s approach is the wrong way to do it. “

Conaway added that he believes a proposal made by Rep. Ronald Neugebauer, R-Tex., called the Supplemental Coverage Option is on the right track. “If a producer wants to cover shallow losses, he can buy coverage to do that,” Conaway said.

“In short, the Senate bill has no price protection and is, therefore, not bankable to farmers and not fiscally responsible to taxpayers,” Conaway continued.

“So far, this problem has been misreported as a north-south issue. But, let me just say this: If we have a few more weeks of commodity prices taking the kind of thumping that they took last week, the importance of meaningful price protection in a farm bill will become clearer to everyone. “

Conaway also said that the Senate Agriculture Committee had cut back on the change in food stamp policy that was sent to the supercommittee in charge of deficit reduction last fall because CBO now assumes that same policy would achieve $8 billion in savings, rather than the $4 billion originally estimated, and also would increase the share of deficit reduction the commodity title and crop insurance would bear from $15 billion agreed to last year to roughly $18 billion this year.

“This and all the rest leads me to conclude that what the Senate has before it cannot be called a farm bill at all,” Conaway said. “Fortunately, I am confident that in the House process we will cut spending, we will reform and streamline policies, we will eliminate duplication and achieve regulatory reform, and in this process, we will restore balance and equity and put the ‘farm’ back in the farm bill.”

House Agriculture Committee Chairman Frank Lucas, R-Okla., did not criticize the Senate bill, but he endorsed the price protection the Senate bill does not include.

“That safety net has to exist for all regions and all crops, and it has to be written with bad times in mind,” Lucas said. “That’s why it is vitally important that the commodity title provide producers with options so they can choose the program that works best for them, whether it is protecting revenue or price.”

House Agriculture Committee Ranking Member Collin Peterson, D-Minn., already said he agrees with Lucas that the system of target prices and countercyclical payments should be continued. Peterson noted that, after the price-triggered payments were ended in the 1996 farm bill, Congress bailed out farmers with ad hoc disaster payments

But, Peterson added that given the fiscal problems now, "you can forget about getting bailed out, so if you get this thing wrong, good luck,” DTN reported.

Testimony by economists and farm leaders stayed within predictable regional and commodity group arguments. The hearing continues Thursday.