Digesting the House farm bill
The staff of farm groups and members of Congress were still digesting the House Agriculture Committee's draft of a Farm Bill Friday, and finding parts of it more palatable than others.
To the National Corn Growers Association, the bill seems less market-oriented than the Senate's version. To the Environmental Working Group, it's too generous to commodities at the expense of conservation and nutrition programs. And to one member of the Senate Agriculture Committee it lacks payment reforms.
Both the Senate bill and the House draft eliminate direct payments, which accounts for most of the projected savings in federal spending on commodity programs over the next 10 years.
The Congressional Budget Office projected potential savings from both bills when each committee released a draft, comparing the savings with potential spending under current law. The CBO estimate of savings, known as a score, is broken down by the bill's sections, or titles--for commodities, conservation, nutrition, energy and more. But it also breaks it out by commodities. According o the CBO score released late Thursday, the House committee's savings from farm program spending on corn would be more than $11 billion over 10 years. The CBO scored savings from corn at $5.5 billion when the Senate Ag committee released a draft last April, half as much as the House version. (The final Senate bill was slightly different, with more spending added back for the energy title by the committee and crop insurance spending cut by a floor amendment that trims premium subsidies for high income farmers. But the House is where the Senate was last April, with more changes in the bill possible in the weeks ahead.)
Sam Willett, senior director or public policy for the Corn Growers, noticed the change in spending on corn.
"Corn accounts for about half of the savings in the commodity title," Willett told Agriculture.com Friday. Other commodity groups have told the House Agriculture Committee that the Senate's new revenue protection program, Agriculture Risk Coverage (ARC), benefits corn farmers more because the bill starts at a time when corn prices have been boosted more than for other crops by demand for ethanol. So the House committee has added a target price program that farmers can choose instead of its own revenue program, Revenue Loss Coverage (RLC).
Willett said he doesn't yet know all the reasons why the CBO projects fewer benefits to corn from the House bill. But its RLC is less generous than the Senate's ARC.
ARC covers planted acres. LRC covers planted acres, but only up to a farm's historical base, or history, of acres planted to a crop. RLC starts when a county's revenue drops 15% below a five-year benchmark. ARC kicks in at an 11% loss in revenue. And RLC pays only at a county level. The Senate bill would allow farmers to sign up for farm-level coverage.
"Obviously, one contributing factor would be the loss of a farm option" in the House version of revenue protection, Willett said.