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Senators back revenue-based safety net

Joined by telephone by the leaders of the National Corn Growers Association and American Farmland Trust, the second ranking Democrat in the Senate Leadership, Dick Durbin of Illinois and Senate Agriculture Committee member Sherrod Brown (D-OH) Wednesday announced a farm bill proposal that would rely on revenue-based countercyclical payments tied to crop insurance.

"I think the old time religion we've had on some of the farm bills just really doesn't apply to the market today," said Durbin, who is the assistant majority leader in the Senate.

Brown said he believes the concept may yet be adopted by the Senate Agriculture Committee, which won't mark up its version of the next farm bill until September.

"I think we have a reasonably good shot in the committee and a better chance on the floor (of the Senate)," he told reporters.

The Farm Safety Net Improvement Act, as the Senators call their bill, is similar to proposals from the Corn Growers and AFT, except that the trigger for payments to farmers would be based on prices and yields at the state level. The original Corn Growers idea is to make payments when revenue falls below a county level trigger while AFT has proposed making payments based on national level yields and prices.

"The state trigger will not be as good as the county but with the integration [with crop insurance] you'll be able to buy up," the Corn Growers' president, Ken McCauley told Agriculture Online.

McCauley said the he believes buying higher levels of crop insurance would be less expensive when tied to the state-level revenue program.

And, because the cost of insurance subsidies paid by the federal government would be less, that savings will help pay for the revenue-based program that would replace conventional countercyclical payments. McCauley said that the Durbin-Brown bill would continue direct payments that are the same as in the current farm bill. Another source of savings to the government is that marketing loans would become recourse loans. In other words, you couldn't forefeit grain to the USDA's Commodity Credit Corporation in place of repaying the loans.

All this is just part of the shift in lobbying over the farm bill as the House winds up its version, which could come up for a vote Thursday. Agriculture Secretary Mike Johanns threatened Wednesday to recommend a presidential veto of the final farm bill unless the House version isn't changed. Johanns objects to some proposed tax increases that would pay for part of the House bill, as well as its failure to adopt tougher payment limits. The USDA has recommended not paying farmers with three years of average adjusted gross income over $200,000. The House bill uses a gross income cap of $1 million.

The House bill also includes an option that would allow farmers to sign up for either the same type of counter-cyclical program in the 2002 farm bill or to try a revenue-based payment program.

McCauley's group was one of many commodity and conservation groups at a press conference with House Agriculture Committee Chairman Collin Peterson (D-MN) this week that voiced support for his committee's bill as well.

Representative Ron Kind (D-WI) is still vowing to offer amendments to the House bill, which reformers say still spends too much on commodity programs, including payments that have gone to deceased farmers. Kind's own version of a farm bill, supported by reformers and Republicans who are fiscal conservatives, would phase out commodity programs and replace them with a savings account that could be tapped in years of financial losses.

"We're right there with the chairman (Peterson) on almost everything and definitely against the Kind amendment," McCauley told Agriculture Online.

Eventually, when the Senate and House versions of the farm bill are combined in a conference committee, some form of revenue-based program appears more likely.

"I welcome the contribution to our work on the new farm bill by Senators Durbin and Brown. I also commend the National Corn Growers Association, and particularly NCGA members from Iowa who worked so carefully and so diligently on this proposal," said Sen. Tom Harkin (D-IA), chairman of the Senate ag committee. "As I have said a number of times, a revenue-based countercyclical program makes a lot of sense. Now that the legislation is introduced, that should allow a fuller and more complete analysis of the proposal and how it would work for agricultural producers in the actual practice."

Joined by telephone by the leaders of the National Corn Growers Association and American Farmland Trust, the second ranking Democrat in the Senate Leadership, Dick Durbin of Illinois and Senate Agriculture Committee member Sherrod Brown (D-OH) Wednesday announced a farm bill proposal that would rely on revenue-based countercyclical payments tied to crop insurance.

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