The Hagstrom Report

Agriculture News As It Happens


North vs. South battle continues over commodity title

The continuing battle between the North and the South over the commodity title in the farm bill broke into full relief over the weekend as a coalition of 33 senators called for the inclusion of the Senate-passed farm bill in an end-of-the-year legislative package, and the USA Rice Producers Association released a map showing that the senators who signed the letter were all from northern states and declared the Senate bill to be unfair to the South.

The letter to Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., was organized by Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. John Hoeven, R-N.D. In the bipartisan letter, the 33 senators in some sentences called for passage of the farm bill before the end of the year and in others said that bill should be the bill passed by the Senate in June.

“With each passing day, the difficulty of enacting a farm bill before the end of this Congress grows,” the senators wrote in a letter dated Friday. “Congress must do the responsible thing and pass a full, five-year reform farm bill. Accordingly, we urge you to consider folding in the Senate’s strong bipartisan bill in any end-of-year package.”

The potential impact of the letter is uncertain because only one-third of senators signed it and Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., and Senate Agriculture ranking member Pat Roberts, R-Kan., did not add their signatures.

Stabenow and Roberts have made a compromise offer to the House Agriculture Committee, but House committee Chairman Frank Lucas, R-Okla. and ranking member Collin Peterson, D-Minn., have rejected it as inadequate.

Farm bill negotiations were at a standstill on Friday, but lobbyists said over the weekend they hope they resume this week. News accounts over the weekend said that President Barack Obama and House Speaker John Boehner, R-Ohio, were continuing to negotiate on “fiscal cliff” legislation into which the farm bill could be placed.


States in blue are those of the 33 senators who advocate folding the Senate farm bill
into any end-of-year legislative package. A “2” indicates both senators signed the letter
to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky.
(Source: U.S. Rice Producers Association)

But the letter seems to have inflamed regional passions. On Saturday, The Rice Advocate, a publication of the U.S. Rice Producers Association, included a map of the United States that showed the states whose senators signed the letter and whose did not. An article about the situation was headlined, “The Senate Farm Bill: A Picture is Worth a Thousand Words.”

“It is no secret that many Southern producers believe that the Senate bill is tilted toward ‘Northern interests’ at the expense of rice, peanut, and other farmers in the South,” the rice producers wrote.

“Some politicians have found creative new steps to dance around the fact that the Senate farm bill is so strongly discriminatory, geographically speaking. But plotting the signers of this week’s letter on a map of the United States pretty much reveals the inequity of the Senate farm bill in one glance.”

In the map, each state colored blue indicates that at least one senator signed the letter; those with a “2” denote those in which both signed it.

The rice producers also noted that, “according to the Congressional Budget Office, the Senate bill would hammer rice producers by reducing their safety net by more than 64 percent! Spending on most commodities falls much less, while that for at least one commodity increases by more than $1 billion.”

That commodity appears to be soybeans.

The Senate-passed bill’s Agricultural Risk Coverage program would pay farmers for “shallow losses” not covered by crop insurance and would end target prices as triggers for government payments. The House Agriculture Committee-passed bill would give farmers the option between the Agricultural Risk Coverage program and a Price Loss Program that would continue and raise target prices.

The central issue appears to be whether a way can be found to encourage a level of rice production, particularly in Texas, that will sustain the rice industry’s milling infrastructure.

One way to do that is to tie payments to current production rather than historical production, which the House bill does. But Northerners say that tying payments to current production could skew planting decisions toward crops that have higher target prices relative to market prices, and might also encourage growers in other countries to file cases in the World Trade Organization charging that the U.S. farm program violates WTO rules against encouraging production of specific crops.

Southerners meanwhile say that the Renewable Fuel Standard, which sets requirements for the use of renewable fuels in the nation’s gasoline supply already encourages the production of corn and, to a lesser degree, soybeans.

The soybean growers have also noted that soybean production has been growing in the South, and said that Southern politicians should think twice about favoring rice, even though it is a traditional industry, over soybeans.

The Daily Advertiser, a Louisiana publication, noted in a story Sunday that rice has traditionally been the second-most valuable crop in the state after sugar cane, but that in 2010 the value of soybeans exceeded rice.

But House Agriculture Committee Chairman Frank Lucas, R-Okla., who comes from a more arid state, has noted that soybeans can’t grow everywhere.

The map also shows that Northern senators are ignoring the argument of House Agriculture Committee ranking member Collin Peterson, D-Minn., who has said that it is important to maintain target prices in all regions. Peterson has noted that farm benefits under the Senate bill could decline because they would be passed on past market prices rather than target prices.

Both senators from Minnesota, North Dakota, South Dakota and Montana signed the letter.

In their news releases, several Northern senators were more vigorous in their statements than in the letter.

“The farm bill is a jobs bill and there is no excuse to put rural jobs on hold any longer. The Senate passed a strong, bipartisan farm bill months ago that is ready to be signed into law right now,” Baucus said.

“The farm bill version the Senate passed with broad bipartisan support would not only help our farmers and ranchers, but also save $23 billion dollars toward the deficit,” Hoeven said.

“The Senate farm bill is a fiscally responsible plan that came together because folks worked across party lines to support America’s farmers and ranchers,” said Sen. Jon Tester, D-Mont. “The bill preserves a strong safety net while making long-needed reforms to save taxpayers money, and passing it will create jobs, increase certainty, and safeguard the future of Montana’s number one industry.”

“The Senate-passed farm bill gives producers long-term certainty and provides necessary assistance to producers affected by this year’s devastating drought. Not only that, but our bill actually reduces the deficit and can help fiscal cliff negotiators meet their goals,” said Sen. Tim Johnson, D-S.D. “The House has shown no interest in considering a farm bill on their own, so we need to find a way for them to act before the end of the year. South Dakota farmers and ranchers deserve the certainty of a five-year farm bill.”

But National Farmers Union President Roger Johnson called on the legislators to compromise.

“It will be a real shame if the Senate and House do not seriously negotiate the commodity title,” Johnson said.

“There are lots of folks who can be blamed for that, starting in the House, I suppose,” he said. “Nonetheless, if the Senate version is forced on everyone it will leave a lot of bitter feelings. A bill shoved down someone else's throat is not helpful long-term to this industry.”

Johnson added, “Farmers do not need big payments of any form when times are very good. When someone clearly has the upper hand, being magnanimous would be a big virtue.”

Senators who signed letter supportinginclusion of farm bill in end-of-year legislation

  • Sen. Max Baucus, D-Mont.
  • Sen. John Hoeven, R-N.D.
  • Sen. Al Franken, D-Minn.
  • Sen. Amy Klobuchar, D-Minn.
  • Sen. Mike Johanns, R-Neb.
  • Sen. Michael Bennet, D-Colo.
  • Sen. Ron Wyden, D-Ore.
  • Sen. Barbara Mikulski, D-Md.
  • Sen. Tim Johnson, D-S.D.
  • Sen. Richard Lugar, R-Ind.
  • Sen. Tom Udall, D-N.M.
  • Sen. Daniel Coats, R-Ind.
  • Sen. Claire McCaskill, D-Mo.
  • Sen. Chris Coons, D-Del.
  • Sen. Kent Conrad, D-N.D.
  • Sen. Jerry Moran, R-Kan.
  • Sen. Herb Kohl, D-Wis.
  • Sen. Pat Leahy, D-Vt.
  • Sen. Robert P. Casey Jr., D-Pa.
  • Sen. Ben Nelson, D-Neb.
  • Sen. Jeff Merkley, D-Ore.
  • Sen. Sherrod Brown, D-Ohio
  • Sen. Mark Udall, D-Colo.
  • Sen. Jon Tester, D-Mont.
  • Sen. John Kerry, D-Mass.
  • Sen. Chuck Grassley, D-Iowa
  • Sen. Joe Lieberman, I-Conn.
  • Sen. Tom Harkin, D-Iowa
  • Sen. Olympia Snowe, R-Maine
  • Sen. Benjamin Cardin, D-Md.
  • Sen. Mark Begich, D-Alaska
  • Sen. John Thune, R-S.D.
  • Sen. Susan Collins, R-Maine