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Senate Ag Committee votes out a farm bill

Agriculture.com Staff 10/25/2007 @ 2:52pm

The Senate Agriculture Committee unanimously approved a farm bill that critics are already saying doesn't go far enough in reforms.

Like the House bill passed last summer, it has no firm cap on commodity program payments and it does not make the dramatic changes in commodity and conservation programs that Congress passed in 2002 when the federal government had a budget surplus. Most of the commodity title looks a lot like that 2002 farm bill, continuing marketing loans and direct and countercyclical payments.

The bill does have some new money for nutrition programs, cellulosic energy development and conservation. And it offers a new commodity program which Chairman Senator Tom Harkin (D-IA) credited to the work of the corn grower groups.

The new Average Crop Revenue Program (ACR) would be offered to farmers on a voluntary basis if they opt out of the current safety net -- the direct and countercyclical payments and marketing loan program. Instead, producers would get a fixed $15-per-acre payment for all crops each year as well as payments if yields and prices drop below expected revenue on a state level. It would not start until 2010.

"That will give farmers an option of whether they stick with the old ways of doing things or if they want to try something new," Harkin said.

Unlike old programs, the ACR would be tied to rolling averages of both prices and yields, so protection could actually increase if prices continue to rise, Harkin said. Loan rates and target prices, which were increased slightly in the Senate bill, would remain the same for five years.

Harkin had to accept changes in the program, however, when the committee adopted an amendment offered Wednesday by Senator Pat Roberts (R-KS). Roberts wanted the ACR to be paid on only 85% of base acres, not 100% as in Harkin's farm bill. And, because of concerns about the ACR's effect on the crop insurance industry, the amendment removed a reduction in crop insurance premiums that farmers would have gotten when they enroll in ACR.

MIXED FEELINGS ABOUT CHANGES

Ron Litterer, the Greene, Iowa, farmer who heads the National Corn Growers Association, had mixed feelings about the Roberts amendment.

"We really appreciate Senator Harkin's advocacy of our proposal," he told Agriculture Online.

But the amendment makes ACR less attractive, Litterer said

"Payments can still be made but we won't have the reduction in premiums," he said. "I think it's going to vary considerably but because of the crop insurance removal, it will significantly reduce participation."

During debate, agriculture committee members disagreed over how much the crop insurance industry has benefited from the Roberts amendment.

Senator Sherrod Brown (D-OH), a strong supporter of ACR, said members of the committee were unwilling to take on the crop insurance industry.

"They profits continue to rise. The've done very well. Everybody should make a contribution [to savings in the farm bill]." Brown said.

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