While still not law, farm bill outlines are taking shape

Nebraska

Although legislation that will establish federal farm policy for the next five years won't be finalized for some weeks, the broad outlines are clear enough that Nebraska agricultural producers and others can start planning how the farm bill will affect them.

The U.S. Senate and House each have passed versions of the farm bill, which will go to conference committee this month to iron out differences before going to President Bush.

University of Nebraska-Lincoln agricultural economists will discuss the emerging farm bill during the Cornhusker Economics Management and Outlook Conferences, which will be held in five Nebraska towns Jan. 28 to Feb. 1.

Both House and Senate versions of the farm bill include a shift in the basic mechanics of farm commodity programs, said University of Nebraska-Lincoln public policy specialist Brad Lubben.

The current farm income safety net is based on price, but under the new farm bill, farmers would have the option of a safety net based in part on revenue. The revenue-based program would add yield to the safety-net calculation and would make a payment to participating producers when the combination of yield and average price produces a revenue calculation that falls below targets. The House bill uses national yield and price calculations, while the Senate version incorporates state-level yields and national average prices.

Supporters of this approach say it will provide better protection against falling incomes and could save billions of dollars over the next five years. To get the coverage, though, farmers would have to forgo several supports that have been pillars of farm programs for years.

During the farm bill signup, producers will need to decide whether to choose the price-based or revenue-based program.

"It will change how producers will want to manage their marketing and insurance decisions," Lubben said. "This will be a key educational issue for the coming year."

The Senate version of the farm bill includes a new $5 billion fund for weather-related agricultural disasters that was added by Senate Finance Committee Chairman Max Baucus, a Montana Democrat who is up for re-election next year. Lubben said that provision faces a tough challenge in the House-Senate conference due to its cost.

Both bills include limits on farm subsidies, but the limits are relatively modest--so modest that this provision could offer "veto bait" for President Bush, whose administration has proposed much tighter limits, Lubben said.

"There are no revolutionary changes in payment limits," he said. "There are continuing reforms instead of substantial, sweeping changes."

While both the House and Senate farm bills propose increased spending on conservation programs, they differ on which programs to emphasize. The House version would increase funding on the Environmental Quality Incentives Program, while the Senate would hold EQIP funding in check to put more money into the Conservation Security Program.

Typically, EQIP is more focused on livestock than CSP.

On another front, the new farm bill would reaffirm that mandatory country of origin labeling will take effect in September 2008 but under revised requirements that may reduce the industry's compliance costs.

The legislation also includes funding for several regional and rural development projects. The new Rural Collaborative Investment Program would provide a pool of money for counties and communities that work together on projects that address regional needs.

Dave Peters, a UNL rural sociologist, thinks this program could be a boon for rural Nebraska.

"Nebraska is very well positioned to take advantage of this because we have a history of working together," he said. "We're a state that's awash in good ideas but not awash in money to carry them through."

Lubben, Peters and others from UNL will discuss the farm bill during the Cornhusker Economics Management and Outlook Conferences. Registration costs $25 and includes lunch and all conference materials. For more information, call 800-535-3456 or 402-472-2776, or e-mail ssterkel1@unl.edu. Complete agenda and online registration is available at http://www.agecon.unl.edu/resource/cemoc.html.

1/28/08
6 Star Midwest Ag\10-B

Date: 1/22/08

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