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.