NSAC's Blog

Path to the 2012 Farm Bill: Senate Examines Commodity Programs

March 15, 2012

On March 15, the Senate Agriculture Committee  held its final hearing in preparation for writing the 2012 Farm Bill.  The hearing addressed risk management and commodity programs, and included testimony from farmers, crop insurance agents, commodity and farm groups, including:

  • Michael Scuse, USDA Farm and Foreign Agricultural Services (Washington DC)
  • Hope Hills, blueberry grower (Michigan)
  • Jarvis Garetson, crop farmer (Kansas)
  • Bob Carden, crop insurance agent (Florida)
  • Steve Rutledge, Farmers Mutual Insurance Company (Iowa)
  • Steve Wellman, American Soybean Association (Nebraska)
  • Pam Johnson, National Cotton Growers (Iowa)
  • Erik Younggren, National Association of Wheat Growers (Minnesota)
  • Jimbo Grissom, Western Peanut Growers (Texas)
  • Travis Henry Satterfield, rice farmer (Mississippi)
  • Chuck Coley, National Cotton Council (Georgia)
  • Roger Johnson, National Farmers Union
  • Bob Stallman, American Farm Bureau Federation
  • Ryan Best, Future Farmers of America (New Mexico)

Along with the need for a farm bill this year, crop insurance was a topic of much discussion and took center stage in today’s hearing.

This hearing marks the end of a series of committee hearings, and the Senate Agriculture Committee will now sit down to begin writing a farm bill, which will almost certainly include revamping Title I commodity programs by replacing direct payments with some sort of revenue based insurance program.

“Key issues were raised by Senators and witnesses today, including what effect commodity and crop insurance subsidy proposals will have on crop diversity and flexibility, new farming opportunities for young and beginning farmers, program integrity, and conservation of precious soil and water natural resources,” commented NSAC Policy Director Ferd Hoefner.  “Those questions and comments are a good sign.  Unfortunately, none of the major proposals on the table to date address these central concerns in a substantive and comprehensive manner, suggesting there is still a good deal of work to do before voting on a new farm bill.”

Whole Farm Revenue Insurance

Almost every witness who testified cited crop insurance as being the single most important program to farmers all across the country.  One farmer from Kansas said that he was willing to give up every other program but crop insurance.  Another farmer who grows blueberries on 120 acres in western Michigan, spoke about how the best safety net is the one you don’t have to use.  Hope Hills has been enrolled in the Adjusted Gross Revenue (AGR) program for the past ten years and has never had to make a single claim.

AGR provides revenue protection to producers of specialty crops and other non-commodity crops, using a whole-farm approach.  Although AGR has proven to work for some specialty crop producers, such as Hills, it is only available in certain states and certain counties and has had quite limited participation.  When asked about expanding whole farm revenue insurance options by Senator Lugar (R-IN), Hills agreed that innovation is needed to meet the risk management needs of specialty crop producers.

USDA Under Secretary Scuse also mentioned in his testimony that USDA’s Risk Management Agency should be given more flexibility to develop new products to serve the needs of all producers.  NSAC will be advocating that RMA be given the authority to develop a whole farm revenue insurance produce that is available in all states and counties and relevant to all types of diversified operations, with equal buy-up options as single crop policies.  This proposal is included in the Local Farms, Food, and Jobs Act (S. 1773, H.R. 3286) which was introduced in the Senate by Sen. Brown (D-OH) and in the House by Rep. Pingree (D-ME) and a version of the proposal is rumored to have been included in the draft farm bill prepared for the Super Committee last year.

Beginning Farmers

Several Senators, including Sens. Baucus (D-MT), Stabenow (D-MI), and Bennet (D-CO),  asked questions pertaining to the risk management needs and other farm bill programs that addressed the specific challenges that beginning farmers face.  Under Secretary Scuse outlined several federal programs specifically targeted to beginning farmers, such as direct and guaranteed loans, and suggested making crop insurance more affordable to beginners.   Several witnesses claimed that the cost of crop insurance without the USDA subsidy would be unaffordable to most producers, especially new farmers just starting out.  RMA has commissioned a study to analyze the barriers that prevent beginning farmers from participating in revenue and crop insurance, and provide recommendations for how to remove these barriers and increase access to risk management tools for beginning farmers.  Sen. Harkin (D-IA) and Reps. Walz (D-MN) and Fortenberry (R-NE) have introduced the Beginning Farmer and Rancher Opportunity Act, a comprehensive set of beginning farmer provisions for the 2012 Farm Bill.

Closing Loopholes

Although payment limits on the amount that any one farmer can receive in federal commodity payments was not highlighted in today’s hearing, Sen. Grassley (R-IA) did bring up the importance of closing loopholes in farm programs.  He has been a longtime champion of placing a hard cap on commodity payments and enacting a measurable standard to determine whether a farmer was actively engaged in the farming to ensure federal payments flow to working farmers.  Sens. Grassley and Johnson (D-SD) have introduced legislation on payment limit reform, and NSAC will continue to advocate that this important provision be included in the next farm bill.

Highly Erodible Land and Wetlands Conservation

Roger Johnson, head of National Farmers Union, testified in support of re-linking highly erodible land and wetland conservation requirements to receipt of crop insurance subsidies.  Sen. Thune (R-SD) was the only legislator who  broached this subject in opening remarks, stating forthrightly the need for commodity policies that help farmers protect the sustainability of the land.  Unfortunately, there were no farmer witnesses chosen for this hearing to speak specifically to this issue and  address it with the same detail spent on other issues discussed at length in the hearing.  Most of the witnesses opposed conservation requirements, though failed to address why it is the taxpayer should be asked to invest $90 billion in crop insurance subsidies under the new farm bill without any assurance that basic soil conservation and wetlands protection measures will be followed.

To watch a video of the hearing or to view testimony from the witnesses, click here.

Categories: Beginning and Minority Farmers, Conservation, Energy & Environment, Farm Bill

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