Senate farm bill proposal includes average crop revenue plan
Senator Tom Harkin, Chairman of the Senate Agriculture Committee announced Wednesday that he has reached an agreement with other key members of his committee, Senator Kent Conrad (D-ND) and Senator Saxby Chambliss (R-GA) to move the bill out of his committee, probably next week.
The Senate farm bill proposal increases spending for cellulosic ethanol, conservation and fruits and vegetables in schools as well as creating a new, optional farm program called average crop revenue or ACR. Harkin said the ACR is modeled on a proposal from the National Corn Growers Association for a revenue-based safety net.
"We believe the range of geographical and philosophical views and interests on our Committee are addressed in a balanced way by the understanding that we've come to," Harkin said.
The bill includes $4 billion over five years in new money for one of Harkin's top priorities, conservation, It restores the wetlands reserve program and grasslands reserve program and provides $1.28 billion for the conservation security program, which has been renamed the conservation stewardship program.
Harkin said the ACR program would be offered to farmers on a voluntary basis if they opt out of the current safety net -- the direct and counter-cyclical payments and marketing loan program. Instead, producers fixed $15 an acre payment for all crops each year as well as payments if yields and prices drop below expected revenue on a state level. Harkin said he believes the ACR will be a better safety net. It would not hurt the crop insurance industry, either, he said.
"I think people will actually buy more crop insurance," he said. Farmers would still need to purchase insurance to cover losses at the county or farm levels.
The Congressional Budget Office estimates that the ACR will save the federal government between $3 billion and $3.5 billion over the life of the farm bill, something that Harkin admitted was a surprise.
"When I first got the word on the savings, I told Mark, run this through again," he said, referring to his top ag staffer, Mark Halverson.
This farm bill proposal will provide 1.3 billion dollars in investments into farm-based energy by supporting programs to help farmers begin to establish biomass crops and offering resources for grants and loan guarantees for cellulosic biorefineries, Harkin said.
"Five years from now we're going to see cellulosic ethanol plants spring up like mushrooms all over the country," Harkin said.
The bill would not allow state-inspected meats to be sold in interstate commerce, which is part of the House farm bill passed last summer. Consumer and labor groups have mounted opposition the state-inspected meat sales, which is strongly supported by the National Association of State Departments of Agriculture.
Nor is the bill likely to have firm payment limits, our sources say.
"We expect there to be some form of payment limitations but that is being worked out now," Harkin's press aide, Kate Cyrul, said Wednesday.