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Farm bill votes slip further down the calendar

By Larry Dreiling

It looks as if final action toward completion of a new farm bill will be sometime in late January, House Agriculture Committee Chairman Frank Lucas said Jan. 9.

“It needs to be done as soon as possible but the issues are of such magnitude I can’t go until I get the issues addressed,” Lucas said in an interview with Politico.

While it looks like the issues over the nutrition title of the farm bill seem to resolved in the conference, the Oklahoma Republican admitted to immense frustration—and some surprise—at the full dimensions of what seems to be the remaining standoff on the bill between Speaker of the House John Boehner, R-OH, and House Agriculture Committee Ranking Member Rep. Collin Peterson, D-MN, over dairy policy.

“I don’t know that I understood just how hard the positions were by the two interested parties,” Lucas said in a hallway interview. “No one has shown any flexibility whatsoever.”

Lucas admitted in an interview on Woodward, Okla., radio station KWOX Jan. 10, the dairy safety net is “kind of an important issue.

“There’s some concern amongst my ranking member, the senior Democrat on the Ag Committee, who put the language together in conjunction with much of the Senate, that if you don’t have some kind of a safety valve in dairy insurance, that the wrong signal will be given, and if prices get cheap enough and the insurance program kicks in, that producers will still turn up production, and therefore you need to have a way, once the Treasury has so much exposure, to put a cap on how much production there can be that would be subject to this insurance program. Now that’s Mr. Peterson’s perspective.

“Mr. Boehner, the speaker of the U.S. House’s perspective is Uncle Sam should not have any control over production or supply of anything, so it’s a philosophical debate between the two.”

Boehner, Lucas said, has led an effort to remove supply management. Boehner didn’t remove the dairy insurance provisions, per se, but removed the supply management component.

“The Senate’s language has dairy with the supply management, and that’s what I’m trying to sort out now, is where my speaker in the House has taken a very strong position and my ranking member has taken a very strong position. The problem is they’re looking in two different directions,” Lucas said.

“And the best way I can describe this to my neighbors back home is think of two old herd bulls that somehow manage up in the same pasture on a summer day, and after they pop heads about so many times, temperatures rise, the attitudes harden, and think of yourself going out to separate them. How you separate them without getting smashed between them is a real challenge, ‘cause I’ve got to have a farm bill, and I’ve got to have a dairy component somehow in this farm bill.”

Boehner continued unbowed against Peterson, and Lucas for that matter in his weekly press conference Jan. 9.

“The Soviet-style dairy program we have will continue, but let’s not make it any worse by including supply and management tools,” Boehner said. “I’ve fought off the supply and management ideas for 23 years that I have been in Congress, and my position hasn’t changed, and Mr. Peterson and others are well aware of it.”

Asked directly if he would block the farm bill conference report from coming back to the House floor if it did include the Peterson supply management language, Boehner suggested Lucas would protect him from having to make that decision.

“I am confident that the conference report will not include supply and management provisions for the dairy program,” Boehner said.

Peterson has long said he would be willing to sunset the supply management tools, once farmers have had a chance to adapt to the new margin insurance program.

“The only thing we’re saying is that if you’re taking government help and the market gets oversupplied and so it starts costing the government money, that that cost should be put on the dairy farmers, not on the taxpayers,” Peterson told Minnesota Public Radio News.

In another interview, with the Red River Farm Network, Peterson also said Lucas is the only person among the four primary members of the farm bill conference committee who has been waffling on dairy provisions.

“We’ve been stuck on payment limits for a week,” Peterson said. “Well, I mean, the dairy stuff has been worked out for three weeks, and before we left, you know, because I’m for it, (Senate Agriculture Committee Chairwoman Debbie) Stabenow (D-MI) is for it, (Senate Ranking Member Thad) Cochran (R-MS) is for it, and Lucas was for it. But then the speaker started raising hell, and Lucas got nervous, so now he’s waffling. The problem for him is that the three of us are not.

“So, you know, whatever they want to say about it, they don’t have the votes to take the dairy stuff out of the bill. So it’s in there and it’s the right thing to do. So that’s been worked out.”

Peterson called this last move by Lucas is a new twist that wasn’t there before.

“He tells me that he’s going to need a few days to explore things, but that he understands, at the end of the day, we’ll probably end up in the same place. So that is one issue. But the other issue is the (Sen. Charles) Grassley (R-IA) actively engaged payment limit language. And that’s keeping us from being able to write the final language to close out the bill,” Peterson said.

“This is a fight between the North and the South. What Grassley proposed doesn’t affect Iowa much, but it affects the South big time. And it could take the whole bill down.”

Processors, who bitterly oppose the proposal, counter that the real flaw is that the premiums charged to farmers would be set under law—and not reflect market forces.

Indeed, unlike most crop insurance—in which the government subsidizes the premiums charged by private companies—the margin insurance would be run through the Farm Service Agency. According to Politico, this was done in part to reduce administrative costs and because it is an agency known to dairy farmers. Critics argue that it would be useful to also tap into the experience of a pilot margin insurance program now run through the Risk Management Agency, elsewhere in the Agriculture Department.

Known as Livestock Gross Margin for Dairy, this initiative is seen as very limited in scope, yet the actuarial data collected could serve to help future adjustments in the rates for the larger margin insurance program envisioned in the farm bill. That might help facilitate a faster transition from the supply management tools favored by Peterson to a more market approach favored by Boehner and processors.

“I don’t know that I would word it exactly that way,” Lucas said, “But that would be the net effect of some of the stuff we have been talking about.”

Lucas said to Politico he is now working on options to broker some compromise but he conceded as chairman, “There comes a point in time here where I have to pick a side and go with it.”

Larry Dreiling can be reached by phone at 785-628-1117 or by email at ldreiling@aol.com.

Date: 1/20/2014

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