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AC-what?
By Seymour Klierly If you aren't following the circus of what has become of the farm bill debate in the Senate Agriculture Committee, you are missing a great show. What has come together over the last week is pure entertainment for ag junkies. Less than a week ago the farm bill was floundering away with a huge funding hole. The Senate Finance Committee hadn't provided a pot of money large enough to take care of all of Chairman Harkin's needs. He knew the specialty crop industry demanded additional money, and not that funny money that typically gets thrown around D.C. They demanded real money. He also knew that his plans for the energy, nutrition and conservation titles were tremendously expensive. What could he do? Maybe just close his eyes and think happy thoughts. Through the miracle of the Congressional Budget Office, a once glanced over commodity program revenue option magically appeared to save the day. This program, called the Average Crop Revenue program, somehow manages to save billions of dollars to the federal government, according to CBO. This news was just what the doctor ordered. Even though this new revenue program had not been seen by many outside the Chairman's office, Senator Harkin quickly convinced Ranking Member Chambliss and Senator Conrad to agree with the magical number so the committee could move to a mark up on the farm bill. Each had their concerns about how CBO came up with this savings level but they were determined to move forward, and they did. Now the committee is considering this "ACR" program that few folks seem to understand. The program is designed to be an optional commodity program that producers can sign up for each year. If a farmer takes the ACR option then they forfeit the traditional direct payment, counter cyclical, non-recourse loan program. Instead, producers receive a $15 per acre fixed payment and a program that pays out when state crop revenues fall below the state crop expected revenue. If folks are looking for an easy to understand program, the ACR isn't it. Based simply on press reports, there are more chutes and ladders in this proposal than a kids board game. Under this program, a farmer's ACR payment could actually go to the farmer's crop insurance company instead of the farmer. Yikes! Now anyone who understands farm bill politics knows that real farm bill is written in the conference committee and the likelihood of the ACR as it's written becoming law is slim to none. However, because is supposedly saves money, which can then be used in other farm bill titles, Senate leaders will likely keep viewing it as that magical pot of gold at the end of the rainbow. Date: 10/24/07
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