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Farm bill options shrinking?
Three major commodity groups will leave the Commodity Classic in Florida without making big changes to their top goals for farm policy--getting a farm bill passed this year and defending crop insurance from cuts.
But as the amount of money available for commodity programs appears to be shrinking, one of the three, the American Soybean Association, softened its support for a revenue program that would protect farmers from part of the shallow loss not covered by crop insurance. A program to do that, called the Agriculture Risk Coverage (ARC) was included in a Senate farm bill last year that didn't become law. ASA delegates agreed without any debate Saturday that "funding may be insufficient to cover the cost of ARC or another acceptable revenue-based risk management program."
ASA is now willing to throw its weight behind other programs, the supplemental coverage option, which would enhance crop insurance, or a target price program, if it doesn't distort planting decisions.
The farm bill is getting lost in the high-profile battles in Congress over mandatory trims to spending, the so-called sequestration that began Friday, as well as a possible government shutdown near the end of this month. At that point, a continuing resolution that keeps government running without passage of a budget expires.
Soybean leaders tell Agriculture.com that the shift is mainly about giving the group flexibility in an uncertain time.
"With sequestration just beginning, with budget reconciliation to come into play over the next few weeks, we don't know what will be offered," ASA president Danny Murphy said of the farm bill that's on the back burner in Congress. "There's concern if enough money will be there for a viable option" for ARC.
At this point, the group isn't certain what kind of farm program will be offered by the ag committees to replace direct payments, which have been extended for this year but are not expected to be part of a new farm bill.
Even the National Association of Wheat Growers, which once was one of the strongest supporters of direct payments, seems resigned to their loss.
"Obviously, the direct payments were really beneficial to the wheat industry. They aren't even talked about any more," NAWG president Bin Von Bergen of Moccasin, Montana told Agriculture.com
NAWG hasn't changed its policy priorities from a year ago, but Von Bergen won't be surprised if there's less money for commodity programs and "that the projected safety net is going to have to be changed."
As commodity groups were meeting in Kissimmee, Florida this week, the Congressional Budget Office released its latest estimate of how much federal spending would be needed over 10 years if the farm bills written in 2012 become law this year. A year ago, the Senate farm bill was projected to save $23.1 billion and the House bill would have saved $35.1 billion.
On Friday, the CBO slashed the expected savings to $13.1 billion for the Senate bill and $26.6 billion for the House bill.
One of the reasons for the $10 billion drop in savings from the Senate bill is that the commodity programs, including ARC, would cost $3.8 billion more than was expected last year. Higher crop prices make ARC potentially more expensive
The National Corn Growers Association did not change its farm bill policy this week.
"ARC remains our priority going forward," said NCGA president, Pam Johnson, a Floyd, Iowa farmer.
But Johnson, too, knows the money available for commodity programs could be shrinking.
"The sequester, and continuing resolution and budget are pretty much going to frame what it will be like," she said.
Crop insurance remains high on the list of programs the groups want to protect.
"Federal Crop Insurance is our top priority," said Wheat Growers president Von Bergen.
Neither the ASA nor the Corn Growers changed their opposition to linking eligibility for crop insurance to the conservation compliance rules that apply to commodity programs.
"Producers honestly can't afford to be without crop insurance," Johnson of the Corn Growers said. "If you have a five-inch rain, that a can put you out of compliance and there's nothing you can do about it."
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