The Hagstrom Report

Agriculture News As It Happens

Indiana lawmakers introduce farm bill proposal

Sen. Richard Lugar, R-Ind., a former chairman of the Senate Agriculture Committee, and Rep. Marlin Stutzman, R-Ind., on Wednesday introduced a farm bill proposal that they emphasized would save taxpayers $40 billion.

The Rural Economic Farm and Ranch Sustainability and Hunger Act (REFRESH), as Lugar and Stutzman called their program, would reform farm programs, cutting $16 billion, a 24.5 percent reduction, update and streamline conservation programs for a savings of $11.3 billion, a 17.6 percent reduction and close what they call eligibility loopholes in nutrition programs, saving $13.9 billion, a 2 percent reduction.

“Roughly two-thirds of the savings would come from farm and conservation programs, and a third from nutrition programs, which represent three-fourths of the USDA budget,” they noted in a news release.

The Lugar-Stutzman bill would end current farm programs including direct payments to farmers, counter-cyclical payments, the ACRE program and marketing assistance/loan deficiency payments.

The bill also includes a proposal announced last week by Sen. John Thune, R-S.D., Lugar, and others to establish an aggregate risk and revenue management (ARRM) program that allows producers to protect between 90 percent and 75 percent of their expected crop revenue.

All farmers would still be able to purchase supplemental revenue insurance that is underwritten by the USDA Risk Management Agency, Lugar and Stutzman said in a news release.

Lugar and Stutzman propose repealing the mandatory federal sugar program and replacing the dairy price support (DPPSP) and milk income loss contract (MILC) programs with a voluntary margin protection program that covers 80 percent of the producers’ production history when margins fall below $4 per hundred-weight.

The National Milk Producers Federation said the dairy title legislative language includes the key elements of its "Foundation for the Future" program and the Dairy Security Act introduced by House Agriculture Committee ranking member Collin Peterson, D-Minn., and others.

But International Dairy Foods Association President Connie Tipton, who represents the dairy processors, said in a release today that her group still opposes the measure.

“While we appreciate the efforts to include dairy in these bills as a starting point for discussion, we adamantly oppose the Dairy Market Stabilization Program because it is anti-consumer and imposes new taxes on dairy manufacturers," Tipton said. "Not a single congressional hearing has been held or economic study conducted on the impacts of the new and significantly altered details of this program on the dairy industry."

Lugar noted that he was the author of the Conservation Reserve Program, which was passed in 1985 to idle marginal farm land that had been put into production during the grain boom of the late 1970s and early ’80s.

The 2008 farm bill allows the government to pay farmers to idle 32 million acres, but as crop prices have risen the number of acres enrolled in the program has dropped to 29 million and Lugar proposed lowering the limit to 24 million acres.

He also proposed achieving further savings by combining the Wetland Reserve Program, the Grasslands Reserve Program, the Farm and Ranch Lands Protection Program, and the Healthy Forest Reserve Program. Similar consolidations and efficiencies would be found in the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program, the Agricultural Water Enhancement Program, and the Wildlife Habitat Incentive Program (WHIP), he said.

Lugar has long been a supporter of nutrition programs, but the REFRESH bill says that the cost of the programs can be reduced by closing eligibility loopholes, eliminating government overlap and improving the efficiency of the food stamp program now known as the supplemental nutrition assistance program or SNAP.

“The savings of $14 billion comes without devastating the program used by as many as 43 million low-income Americans in need of additional food security,” Lugar said.