The Hagstrom Report

Agriculture News As It Happens


Farm groups express views on farm bill

As speculation continued that a “fiscal cliff” deal will include spending cuts, the National Farmers Union board of directors on Monday urged Congress to pass a five-year farm bill as part of that legislative package while the American Soybean Association said Congress should be careful about proposals to include a commodity program based on target prices.

The NFU board noted that the Senate-passed farm bill would provide $23 billion in savings over 10 years while the House Agriculture Committee-passed bill would save $35 billion. Treasury Secretary Tim Geithner has said that the administration would propose cutting farm spending, but reports on the negotiations in recent days have not mentioned farm program cuts.

“The 112th Congress needs do its job,” the NFU board said in a resolution. “Congressional approval ratings are very low and the inability to pass legislation is alarming. There remains an opportunity to move beyond those problems if lawmakers come together to avoid the fiscal cliff as well as to pass a five-year farm bill.”

“The time for obstruction and inaction is over,” the NFU said. “Family farmers and ranchers need the certainty that only a five-year farm bill can provide.”

The American Soybean Association on Monday sent the House and Senate Agriculture committees a letter expressing support for the Agricultural Risk Coverage (ARC) program in the Senate-passed bill and saying it had “major concerns” with the Price-Loss Coverage (PLC) option in the House bill.

The PLC program “establishes much higher and disproportionate reference or target prices that bear little relation to recent average market prices or production costs,” stated ASA.

“Moreover, by tying payments to crops that are actually grown in the current year, the PLC option has the potential to significantly distort planting decisions, production, commodity prices, and government program costs in the event market prices fall.”

ASA noted that, according to its analysis, “soybean farmers would receive less protection than producers of other crops, and the soybean share of crop production in almost all regions would be adversely affected.”

ASA’s letter concluded that “if this option is included in the final farm bill, payments must be decoupled from current-year production and tied to historical crop acreages.”

Corn and soybean growers have favored the Agricultural Risk Coverage program included in the bill passed by the Senate, while rice and peanut growers have favored the PLC option.

Senate Agriculture Committee ranking member Pat Roberts, R-Kan., who has been the most important opponent of the PLC, recently said he would compromise with southerners, but he has continued to expressed concerns about how it is structured.

House Agriculture Committee Chairman Frank Lucas, R-Okla., who introduced the PLC concept, has said he welcomes Roberts’ flexibility, but that a compromise has not yet been worked out.

Meanwhile, the Environmental Working Group and a coalition of conservative organizations said on Monday that Congress should pass a one-year extension without continuing the $4.9 billion direct payments program that crop farmers get whether prices are high or low, Reuters reported. The groups said that total farm bill cuts over 10 years should be $100 billion. Lucas has suggested that the direct payments program should be continued for another year if there is an extension.