The Hagstrom Report

Agriculture News As It Happens


House Ag leaders to push target price proposal

The leaders of the House Agriculture Committee are returning to Washington after a week in their districts, and wishing Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., the best of luck in getting a bill through the Senate in June. But House Agriculture Committee Chairman Frank Lucas, R-Okla., and ranking member Collin Peterson, D-Minn., are even more determined than before the recess to pass a farm bill that includes a target price and countercyclical program for crop farmers as well as the revenue approach that is in the Senate bill.

“I am pleased that Chairwoman Stabenow has floor time for the beginning of June,” Lucas said in an interview on Thursday, adding that he hopes to mark up the bill in his committee later in June. There have been rumors that the House Agriculture Committee will mark up the bill the third week of June, but Lucas was unwilling to confirm a more specific date.

Peterson said in an interview the same day that Lucas is “reticent” about setting a date because he wants to see how the bill fares on the Senate floor. Progress in the Senate will put more pressure on the House to act, Peterson said.

Rep. Frank Lucas, R-Okla.

Rep. Frank Lucas, R-Okla.
Lucas said he wishes Stabenow and Senate Agriculture Committee ranking member Pat Roberts, R-Kan., “the best. It helps me.” He added that he will be looking at the Senate bill, but that he expects to see “more extensive reforms” in the nutrition programs in the House bill.

The Senate bill commodity title is based on a revenue program that would pay farmers some of the loss that crop insurance does not cover when their revenue goes down. The American Farm Bureau Federation and northern commodity groups like that approach, saying it would not interfere with planting decisions, but rice and peanut growers and the National Farmers Union have noted that if prices go down for several years in a row the base for calculating those payments will go down.

Lucas said the situation in Oklahoma has made him more convinced that farmers need the option of a target-price based program as a necessary option.

“The world is still green, which is better than a year ago but it is not raining,” Lucas said in a telephone interview that interrupted work on his Oklahoma farm.

“We have not caught up with subsoil moisture,” he said. “My constituents are still shell-shocked from the drought last summer; they are watching the commodity markets, and they need an option. I want a farm bill that really is a safety net.”

Lucas emphasized that he plans to include the revenue approach in the Senate bill but wants “the second option of a target price, a reference price, a true floor.”

The Senate bill, he said, “keeps the best time the best, but for bad times I don’t see any floor.”

Rep. Collin Peterson, D-Minn.

Rep. Collin Peterson
Peterson, who conducted several meetings with farmers in his northern Minnesota district during the recess, said the conversations had “reinforced my view of the world.”

His farmer constituents, “almost universally think” [a target price and countercyclical payment program] is the preferred option,” he said.

Although the National Corn Growers Association has been a key backer of the Senate revenue approach, “the Minnesota Corn Growers are on board with target prices,” Peterson said.

The American Soybean Association has said its leaders fear that target prices would skew planting decisions. Peterson said two soybean growers raised that issue at one of this meeting, but “they weren’t very vocal about it.”

Wheat growers have supported the revenue approach, but they have also noted there is some support for a higher target price.

Peterson said those in his district “are more interested [in what would happen] if something goes to hell” and that they see eliminating the target price as giving up that certainty.

Some congressional aides have said that target prices would be a way for southerners to get more money out of the farm program, but Peterson said the argument could be made that the revenue approach is a way “for the corn growers to get more money out of the system too.”

Peterson added that his constituents have agreed that farmers should not get government payments when they don’t need them. He added that he believes the revenue approach in the Senate would lead some farmers to buy a lower level of crop insurance coverage. He also noted that the Agriculture Department Risk Management Agency has already rerated crop insurance for corn, which reduces costs.

Lucas interrupted his time at home to travel to California to meet with Western Growers, the nation’s largest association of fruit, vegetable and tree nuts growers. The organization issued a news release noting that Lucas said the 2008 farm bill might be extended, and that if it is extended he would try to find money to extend fruit and vegetable programs that do not have baseline beyond Sept. 30, when the 2008 farm bill expires.

Lucas said he was “just being perfectly honest” with Western Growers about the difficulties of getting the bill passed this year, but that it is by far his preference to finish the bill this year in time to get it implemented.

Peterson noted that Stabenow has said she has the 60 votes to end debate and pass the bill in the Senate. Peterson also noted that Stabenow is “reaching out to the southerners.”

“Hopefully they will be sensible enough to take the deal,” Lucas said. “I think we are on track. There is a possibility we will get it done.”