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House farm bill draft emerges

DANIEL LOOKER 07/04/2012 @ 11:00pm Business Editor

The House Agriculture Committee released a farm bill "discussion draft," Thursday. As expected, the proposed Federal Agriculture Reform and Risk Management Act (FARRM), cuts nutrition programs more deeply than the farm bill passed by the Senate last month. It keeps a revenue program similar to the Senate bill and adds back target prices for a new, improved version of counter-cyclical payments called Price Loss Coverage (PLC).


That, too, was expected, after growers of southern crops, especially peanuts and rice, testified before the House committee that they considered the Senate's revenue program to be inadequate protection from potential drops in income. Under the House committee proposal, growers would have a choice of signing up for PLC or what the House Ag Committee calls Revenue Loss Coverage (RLC).


Like the Senate bill, the House bill would consolidate more than 100 USDA programs and simplifies signing up for conservation programs. And it eliminates direct payments. Its total savings from federal spending over 10 years would be $16 billion from food stamps, more than $14 billion from commodity programs and more than $6 billion from conservation. Total savings would be $35 billion versus more than $23 billion in the Senate bill.


The bill is scheduled to be marked up by the full committee starting next Wednesday, July 11.

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In a statement released with the draft, the committee chairman, Frank Lucas (R-OK), said, "I'm pleased to release this bipartisan legislation with my friend and colleague Collin Peterson [the committee's ranking Democrat]. Our efforts over the past two years have resulted in reform-minded, fiscally responsible policy that is equitable for farmers and ranchers in all regions and will lead to improved program delivery. This bill is an investment in production agriculture and rural America."


The House bill's revenue program appears slightly less generous than the Senate version, called Agriculture Risk Coverage (ARC). Payments for the House RLC program wouldn't start until a producer has a 15% loss in revenue, not the 11% trigger for ARC. The bigger loss requirement helps "ensure that all risk is not removed from farming and that no growers are guaranteed profits," says a committee summary of the bill.


The House bill's revenue program doesn't allow growers to sign up for farm-level coverage as the Senate bill does. Only county-wide revenue losses would trigger payments, so that "a government program is not set up to duplicate, for free, what farmers should pay for under crop insurance," according to the summary.

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