First big salvos fired in farm bill fight
By Larry Dreiling
The long march toward passage of a farm bill by the end of the federal 2012 fiscal year is now under way in earnest.
The Senate Agriculture Committee April 20 released Chairwoman Debbie Stabenow's summary, or--in the arcane parlance of Congress--the committee mark, of her view of the farm bill. The House Agriculture Committee, meanwhile, held its final field hearing on the bill that same day.
In essence, the mark not only belongs to Stabenow, a Michigan Democrat, but to her Republican counterpart, Sen. Pat Roberts of Kansas, as well as all the other members of the committee.
"We are working extremely well together," Stabenow told the association of North American Agricultural Journalists April 17. "We've been meeting for weeks and weeks and weeks. We've spent the last couple of weeks getting down to very specific policy.
"We pretty much know where the issues are and we have tremendous consensus on the majority of the bill. We have seen some wonderful work on the conservation part of the bill. It should have wide support from across the country and across party lines."
Roberts said he and Stabenow have worked hard together along with their staffs to create a workable farm bill.
"The members know we are on a deadline. We need to move expeditiously," Roberts told NAAJ. "Members have been working together. It's not like we've got everything ironed out yet, but (the) staff has been doing a great job. The Senate has to move forward, since it looks like 2013 won't be much better fiscally. We are committed to working together and moving ahead. We may have some tough votes out of this committee, but we are ready to go."
Under the 900-page committee mark, the Senate version of the farm bill claims expected savings of $23 billion over 10 years compared with the current farm bill. The claim is that bill saves taxpayers money while "strengthening initiatives that help farmers, ranchers and small business owners create American jobs."
--Eliminates direct and counter-cyclical payments as well as the Average Crop Revenue Election program, while strengthening risk management. Farmers will no longer be paid for crops they are not growing, will not be paid for acres that are not actually planted, and will not receive support absent a drop in price or yields.
--Consolidates two remaining farm programs into one, in which farmers will have the ability to tailor their risk management coverage in either an individual coverage plan or a countywide coverage plan, with the intent of better protection against real risks beyond a farmer's control. This "shallow loss'' program would pay farmers when modestly decreasing yields or declining prices on land planted result in a farmer's revenue falling below historic averages.
Under the individual coverage provisions, crop revenue is compared to the Olympic five-year average individual yield for that commodity on the producer's farm. In an Olympic average, the high and low years are excluded.
That average is matched by either an Olympic five-year national marketing price for a commodity, or the marketing-loan rate, whichever is higher.
Figure out the payment rate, and then multiply by 60 percent of eligible acres for the commodity. For prevented planting, a 45 percent calculation will be factored.
Farmers who take the county option would have their crop revenue compared to the Olympic five-year county average yield. The eligible acres covered would rise to 75 percent for planted acres and remain at 45 percent for prevented acres.
Under county coverage, all acres planted or prevented from being planted would be covered on a farm. However, for most farmers, the total acreage would not exceed total acres a farmer had for the years 2009 through the 2012 crop year. There would be an opportunity to add acres, such as when land comes out of the Conservation Reserve Program.
--Strengthens crop insurance and expands access so farmers are not wiped out by a few days of bad weather. An average 60 percent of crop insurance premiums are subsidized by the government. The Barack Obama administration had proposed cuts in those subsidies for farmers and payments to insurance companies, but the draft maintains subsidy levels.
The bill retains marketing loans but does not change the marketing-loan rates now being used. The bill does have special marketing-loan provisions that include upland cotton and rice.
Increasing efficiency and improving effectiveness
The Senate bill consolidates 23 existing conservation programs into 13 programs, while maintaining the existing tools farmers and landowners need to protect and conserve land, water and wildlife.
By closing loopholes, tightening standards, and requiring greater transparency, the proposal increases efficiency and improves effectiveness.
The bill increases accountability in the Supplemental Nutrition Assistance Program, once known as Food Stamps, by:
--Stopping lottery winners from continuing to receive assistance;
--Ending misuse by college students;
--Cracking down on retailers and recipients engaged in benefit trafficking;
--Increasing requirements to prevent liquor and tobacco stores from becoming retailers; and
--Eliminating gaps in standards that result in overpayment of benefits while maintaining aid for families in need.
Other parts of the Senate proposal look to increase efficiency and accountability, while strengthening agricultural jobs initiatives by:
--Expanding export opportunities and helping farmers develop new markets for their goods;
--Investing in research to help commercialize new agricultural innovations;
--Growing bio-based manufacturing (businesses producing goods in America from raw agricultural products grown in America) by allowing bio-manufacturers to participate in existing U.S. Department of Agriculture loan programs, expanding the BioPreferred labeling initiative, and strengthening a procurement preference so the U.S. government will select bio-based products when purchasing needed goods;
--Spurring advancements in bio-energy production, supporting advanced biomass energy production such as cellulosic ethanol and pellets from woody biomass for power;
--Helping farmers sell locally by increasing support for farmers markets and spurring the creation of food hubs to connect farmers to schools and other community-based consumers; and
--Extending rural development initiatives to help rural communities upgrade infrastructure and create an environment for small businesses to grow.
Reaction to the release of the mark was mixed. In a statement, American Farm Bureau Federation President Bob Stallman said it sent a letter to the Senate panel urging it to approve the draft "as a vehicle to move the farm bill to the Senate floor in a timely manner."
While the letter said "the importance of completing a farm bill cannot be overstated," it also said that AFBF would seek opportunities "to make adjustments and refinements to improve the legislation."
AFBF's letter said while the draft legislation addresses many of its policy priorities, the organization continues to support a single program option for the commodity title that is extended to all crops and it has concerns about the need for improved "equity across all commodities."
The letter also stated that AFBF would continue to work toward provisions in the bill for a financial safety net that includes a "catastrophic revenue loss program based on county level losses" with coverage at 80 percent of revenue levels.
"Catastrophic loss events are typically beyond any producer's control, and are events that would endanger the financial survivability of the farm," Stallman said. "These events, in the past, have prompted enactment of ad hoc disaster programs. Having a catastrophic plan in place would protect farmers from these situations and extend program benefits only when they are needed, rather than potentially being a supplemental source of annual income."
National Corn Growers Association president Garry Niemeyer said: "(NCGA) is pleased to see the committee listened to the concerns of our nation's corn growers and have done a great job keeping our priorities under consideration while drafting the legislation. NCGA believes the committee print is consistent with what our members have been advocating.
"While we understand this is the first step in a very long process, we applaud the Senate Ag Committee for holding a markup and hope the House Agriculture Committee will swiftly follow suit. We look forward to our continued work with members and staff on this important piece of legislation and urge Congress to pass a farm bill this year."
Not everyone was happy with the Senate mark, as a contingent of farm groups, including the National Cotton Council; National Sorghum Producers; U.S. Rice Producers Association; Southern Peanut Farmers Federation; Western Peanut Growers Association; state corn grower groups from Colorado, Minnesota, and Texas; and state wheat grower groups from Oklahoma and Texas called on Stabenow and Roberts to postpone the official markup, slated for April 25, until at least after an upcoming recess in order to provide members and producers an opportunity to "better understand the markup vehicle and its implications and to offer constructive suggestions for improvement."
The groups complained they first saw the mark on a Friday afternoon and had only a weekend in which to digest the more than 900-page bill, consult with their producers, understand the mark's implications, craft any amendments, identify appropriate offsets, and obtain a score from the Congressional Budget Office.
"We are concerned that this timeframe simply has not allowed for a meaningful opportunity to understand the mark or to offer constructive improvements," the letter said. "We believe providing additional time for committee members and producers to consider the mark and offer suggestions for improvement would contribute to a more transparent process and hopefully result in the best possible product."
In regard to substance, "our first blush impression is that the mark raises serious equity issues and grave concerns over planting distortions. We share in the committee's strong desire to produce an equitable bill that avoids the scenario in which the farm bill is driving planting decisions. By providing additional time for members and producers to fully analyze all the impacts of the proposal, the committee can help avoid this result."
Rick Palkowitsh, a Burlington, Colo., farmer and vice president of the Colorado Corn Growers Association, spoke from his tractor cab while planting his crop. He said his group was one among many that needed more time to examine the bill.
"Particularly because the bill ends direct payments, we need to really see what is in there and determine all the consequences the bill will hand us. After all, it is a 900-page bill," Palkowitsh said. "We know the direct payment is not trade distorting, but it's not popular with the public, so we need to look over the choices being given to us before we can say yes or no to it."
Field hearing in Dodge City
The Senate mark was released as the House Agriculture Committee was preparing for a final field hearing on the farm bill in Dodge City, Kan.
With his typical wit, Roberts said that, on the day of the committee mark, "We'll be here (in Washington) writing a farm bill. They will be there (in Dodge City) having a hearing."
Roberts' quip was typical of the current rift between the House and Senate on how the farm bill will be crafted.
For his part, House Agriculture Committee Chair Frank Lucas, R-Okla., had a different definition for the hearing, attended by only two other Republicans, Mike Conaway of Texas and the host, Tim Huelskamp of Kansas.
"The House Agriculture Committee will continue the process with what I call an 'exercise' mandated on us by the House Budget Committee and the budget resolutions passed in the House on a little thing called reconciliation. It will save around $33 (billion) to $34 billion. It is, remember this my friends, an exercise.
"It is an exercise to achieve savings. It is not the farm bill. The regular farm bill process is not too far away. It will entail cuts or savings in all areas. We will work in a bipartisan fashion to accomplish a farm bill, but it is no small challenge."
The other areas of the bill are achievable and should be relatively simple to pass, Lucas said.
"The commodity title will bring some challenges as you move away from the principles of the last three farm bills. The old direct payment system will be replaced by a new form of safety net we have. There will be a crop insurance program based on revenue as well as on weather and yield.
"Does it not look like I'm having lots of fun with this? No. My hair is a little greyer? Yes it is. Will I consume a lot more Maalox before this process is over with--or some equivalent product? Absolutely. But the committee will do its work."
The Dodge City hearing featured 10 witnesses:
--Gary Harshberger, a Dodge City, Kan., corn, wheat, milo, soybean, and cow-calf producer who chairs the Kansas Water Authority;
--Keith Miller, a Great Bend, Kan., wheat, sorghum, corn, soybean, and cow-calf producer, and a past chairman of the U.S. Meat Export Federation;
--Dee Vaughan, a Dumas, Texas, corn, cotton, sorghum, soybean, and wheat producer, and president of the Southwest Council of Agribusiness;
--Scott Neufeld, a Fairview, Okla., wheat, sorghum, canola, alfalfa, and cow-calf producer, and chair of the Young Farmers and Ranchers Committee of the Oklahoma Farm Bureau;
--Terry Swanson, a Walsh, Colo., corn, wheat, sorghum, sunflower, and cow-calf producer, and chairman of the National Sorghum Producers;
--Frank Harper, a Sedgwick, Kan., cow-calf, corn, soybean, wheat, and sorghum producer, and president of the Kansas Livestock Association;
--Kendall Hodgson, a Little River, Kan., wheat, soybean, corn, sorghum, alfalfa, and cow-calf producer, and a past president of the Kansas Association of Wheat Growers;
--Tom Giessel, a Larned, Kan., wheat, corn, sorghum, soybean, alfalfa, and cow-calf producer, and president of the Pawnee County Farmers Union;
--Woody Anderson, a Colorado City, Texas, cotton and wheat producer, and a past chairman of the National Cotton Council; and
--Zach Hunnicutt, an Aurora, Neb., corn, soybean, and popcorn producer, a member of the Young Farmers and Ranchers Committee of the American Farm Bureau Federation.
Among the highlights, Harshberger said, "A farm bill should provide assistance when producers suffer losses beyond their control. I need a simple program to take to my banker in case my operation suffers a disaster."
Giessel sought the Market Driven Inventory System espoused by Daryll Ray, Ph.D., of the University of Tennessee's Agricultural Policy Analysis Center. MDIS would moderate extreme volatility in the commodity markets while allowing farmers to receive their income from the marketplace rather than from government payments.
Between 1998 and 2010, according to Ray's research, under an MDIS program, farmers would have received just $56.4 billion in government payments instead of the $152.2 billion they received.
Anderson told committee members that he supported the NCC's Stacked Income Protection Plan, a revenue-based crop insurance safety net that would satisfy the World Trade Organization.
Huelskamp asked Hunnicutt how proposed U.S. Department of Labor rules that would prohibit most children under age 16 from driving tractors, using power equipment and working with livestock in certain circumstances, along with other farm chores, would change his operation.
Preparing the fields for corn planting this spring, Hunnicutt said he had his 4-year-old son with him in the tractor.
"He is up on a big tractor in a closed cab and he is safer there than in a vehicle,'' Hunnicutt said, but noted he wouldn't be able to spend that time with his son if the regulations passed.
"My Social Security statement goes back to 5 years old, walking the soybeans fields,'' he said, adding that the DOL's plan "is a sledgehammer to kill a mosquito.''
Food, farm, and jobs bill
Finally, perhaps the biggest controversy of the week came to be what to call the new legislation.
First, Secretary of Agriculture Tom Vilsack told NAAJ members he would not allow them to use the familiar moniker of "farm bill" in his presence, but rather only the "Food, Farm, and Jobs Bill." Lucas continually referred to it as an "exercise." Stabenow had a slightly different take on it.
"We're going to call it 'Debbie and Pat's Big Adventure.'"
The Associated Press contributed to this report.
Larry Dreiling can be reached by phone at 785-628-1117, or by email at email@example.com.