Bill Huffman
Director - Government Relations

The Friday Report

May 21, 2010

The House Agriculture Committee wrapped up a series of field hearings for the 2012 Farm Bill this week. As expected, there were lots of ideas about what farm policy should be, differing opinions about farm payments, crop insurance, the average crop revenue (ACRE) program and small farms versus large farms.

Farm Bill Field Hearings

After reading reports from several of the House Agriculture Committee field hearings it renews our view that writing farm policy is a difficult job and one that is not always going to please everyone or every commodity group.

In Sioux Falls, South Dakota this week much of the testimony at the field hearings called for Congress to make changes in the Average Crop Revenue Election (ACRE) program and to extend the blenders credit for the ethanol market. Farmers in North and South Dakota, Nebraska and other upper mid-west states said the ACRE program “is complex, confusing and difficult to administer and difficult to explain to landlords and should be based on county yields and economics rather than ‘state’ data.”

Southern farmers, on the other hand, say some of the newer risk-management programs such as the ACRE program and Crop Insurance don’t work for their crops. Generally, it appears that most Southern producers prefer the “safety net” provided by the marketing loan program, direct payments and don’t like the way USDA administers the “payment limit” program. Some southern producers also called for a stronger “disaster program” for weather related and catastrophic events such as drought.

Most western producers (those in California) seem to want more market oriented programs such as funding for market development, research, and disease prevention and stronger trade agreements to open foreign markets to California products including tree fruit, grapes, vegetables, specialty crops, wine and commodities such as rice and cotton.  Commodities, such as rice, who have a marketing loan program, certainly want that program continued in the next Farm Bill.

In Texas, most of those who testified at a hearing in Lubbock favored the USDA direct and counter-cyclical programs and marketing loan programs under the 2008 Farm Bill.  Some of the Texans cited problems with payment limitations, eligibility standards and what they called complex application processes for some of USDA’s farm and conservation programs.

It seems that one policy to fit all commodities and regions of the country doesn’t quite meet everyone’s needs. Whether or not Congress would be willing to write different farm programs for various commodities or regions seems unlikely.

The Next Step

Chairman Collin Peterson said his committee began this series of hearings early so that the committee can start drafting a bill next summer and have it ready once the 2008 Farm Bill expires. “My intention is to get this bill out of the House by December 2011 and try to get this bill done on time,” he said.

As we’ve reported before, the Senate Agriculture Committee has not released a schedule for its next Farm Bill effort. It is probably safe to assume the Senate will not begin 2012 Farm Bill hearings until after the election this fall, more likely in early 2011. Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark, is in a tough reelection race, facing a “runoff” election June 8th that she needs to win in order to be the Democratic candidate in the Arkansas Senate race in November. Many observers believe she will win the “runoff” election June 8th, but will be in a very tight race which she may lose this fall against Arkansas Republican Congressman John Boozman, a well respected member of the House of Representatives from Ft. Smith, Arkansas.

Should Senator Blanche Lincoln not be reelected this fall and if the Democrats maintain control of the U.S. Senate, Senator Debbie Stabenow, D-Michigan, would become Chairperson of the Senate Agriculture Committee.

The Arkansas election has the potential for changing the political equation for southern agriculture and rice and cotton because both Chairmen of the two agriculture committees would then be from the Northern tier states of Minnesota and Michigan. It’s going to be interesting!

Commodity Groups Oppose EPA Greenhouse Gas Initiative

A group of 48 commodity groups and other farm and agribusiness organizations have written U.S. Senators urging them to support Alaska Senator Lisa Murkowski’s resolution to disapprove the Environmental Protection Agencies (EPA) regulation of Clean Air Act greenhouse gases. The USA Rice Federation was one of the groups signing the letter. The coalition letter said, “The sole issue is whether Congress will defer to a regulatory agency on a matter that affects virtually the entire economy”. Many Democrats and Republicans have said throughout the entire climate debate that this issue should be decided by Congress, not EPA.

Reminder

USDA’s Farm Service Agency reminded farmers and landowners this week that they have until Tuesday, June 1 to sign up for the 2010 Direct and Counter-Cyclical Program.