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Conferees announce proposed farm bill compromise

Jan. 29, 2014 | 0 comments


In a nearly unanimous chorus, farm groups called on Congress to quickly pass a farm bill package hammered out by conferees and agreed to on Monday night (Jan. 27.)

The package eliminates direct payments to farmers — something that everyone involved had been saying for several years should be done, but which were continued through the many extensions of the old farm bill.

Experts estimate that the direct payments cost the government about $4.5 billion per year. Many interest groups complained that many of these payments went to multiple persons involved in large farming operations and to millionaires who didn't make their living as farmers.

The bill would also cut food stamps more than the Senate's version of the bill and less than the House version.

The House bill would have cut $40 billion from food stamps over 10 years — about five percent — while the Senate's version would have cut $4 billion. The compromise bill out of the conference committee would cut food stamps by about one percent.

The cuts to food stamps, a program that is now called the Supplemental Nutrition Assistance Program (SNAP) administered by the U.S. Department of Agriculture had been the major sticking point in the negotiations on the farm bill.

The White House had signaled to lawmakers that it would veto any measure that cut too deeply into nutrition programs for poor Americans. With fall elections looming, rural lawmakers were eager to begin campaigning with the farm bill behind them, said political observers.

Both houses of Congress were expected to vote on the measure Wednesday or Thursday of this week.

House Majority Leader Eric Cantor (R-VA) has signaled his support for the compromise farm bill, but there was still some doubt if the House would pass it. Last June the House — for the first time in history — voted down a farm bill.

The Tea Party faction of the Republican Party felt the cuts were not deep enough to federal food programs. This time around there is still some doubt if those members will go along with the compromise.

House Speaker John Boehner (R-OH) also signaled his support for the compromise measure, though he said he would have liked to see deeper cuts in certain areas.

"I am proud of our efforts to finish a farm bill conference report with significant savings and reforms," said Rep. Frank Lucas (R-OK), Chairman of the House Agriculture Committee. "We are putting in place sound policy that is good for farmers, ranchers, consumers, and those who have hit difficult times."

"Today's bipartisan agreement puts us on the verge of enacting a five-year Farm Bill that saves taxpayers billions, eliminates unnecessary subsidies, creates a more effective farm safety-net and helps farmers and businesses create jobs," said Sen. Debbie Stabenow (D-MI), Chairwoman of the Senate Agriculture Committee.

Limits removed

Both the House and Senate versions of the farm bill had included provisions to limit how much any individual farmer could receive from government programs, but in the conference agreement, all that was removed.

Both the House and Senate bills had also included provisions to limit how many people per farming operation could receive benefits from government programs, but that was also removed.

The compromise bill also removed a Senate provision that would have limited the amount of crop insurance payments for farmers with higher incomes, but it allotted more money for government-subsidized crop insurance.

Despite bipartisan support in both the House and Senate to limit crop insurance subsidies for producers making more than $750,000 per year, this measure was removed. Conferees also increased the allowable total subsidies per individual beyond what was proposed in any earlier draft.

In the dairy title, the supply management provisions or Dairy Market Stabilization Program (DMSP) which would force farmers to cut back on their milk production during times when feed prices were high and milk prices were low, was cut.

After Boehner called the provision a "Soviet-style" program and indicated he would not let the bill come up for a vote in the House with that provision included, conferees took it out.

The compromise measure includes the dairy margin insurance program that was favored by all the agriculture negotiators and leaders in Congress.

National Milk Producers Federation, which spearheaded the change in dairy policy — including the supply management provision — worked for the last week to try to modify the dairy title to make sure farmers got an effective safety net, even in the absence of that market stabilization component of their original program.

Jim Mulhern, president and CEO of NMPF, said that "despite its limitations, we believe the revised program will help address the volatility in farmers' milk prices, as well as feed costs, and provide appropriate signals to help address supply and demand.

"The program that we have worked to develop establishes a reasonable and responsible national risk management tool that will give farmers the opportunity to insure against catastrophic economic conditions, when milk prices drop, feed prices soar, or the combination."

Mulhern indicated that by limiting how much future milk production growth can be insured, the measure creates a "disincentive" to produce excess milk.

"The mechanism used is not what we would have preferred, but it will be better than just a stand-alone margin insurance program that lacks any means to disincentivize more milk production during periods of over-supply."

In addition the new, proposed dairy program doesn't discriminate against farms of differing sizes, or preferentially treat those in differing regions, he added.

Mulhern said the dairy title in the revised bill establishes a system for the U.S. Department of Agriculture (USDA) to purchase consumer-packaged dairy products during low-margin periods, which will stimulate demand and help dairy farmers when they need it most, and only then.

Rep. Collin Peterson (D-MN) who authored the Dairy Security Act upon which the dairy title was based, said it's no secret that he didn't support some of the provisions in the final bill.

But he said he was pleased the committee was able to work together and put aside partisanship to advance a five-year farm bill.

Peterson, Ranking Member of the House Agriculture Committee said "compromise is rare in Washington these days but it's what is needed to actually get things done. I believe my reservations are outweighed by the need to provide long-term certainty for agriculture and nutrition programs.

"This process has been going on far too long; I urge my colleagues to support this bill and the President to quickly sign it into law."

Wisconsin Farm Bureau Federation President Jim Holte issued a statement urging Wisconsin's Congressional delegation to vote in favor of U.R. 2642 — the revised farm bill.

"This farm bill provides risk management tools and safety net provisions for grain, livestock, dairy and fruit and vegetable growers. This is good news for an agriculturally diverse state like Wisconsin," he said.

Holte said Farm Bureau was pleased that the farm bill compromise offers the "most significant reform to federal dairy policy in a generation." This reform comes in the way of giving dairy farmers a choice of whether or not to choose in a safety net program to protect farmers from volatile milk prices.

Unified support urged

Bob Stallman, president of the American Farm Bureau Federation, said in a statement that he appreciated all the hard work the conferees did to get the farm bill to this point.

"They had many tough decisions to make, but were able to move forward with a solid bill that includes many Farm Bureau-supported provisions. We are particularly pleased with provisions to provide risk management to fruit and vegetable farmers and to support livestock farmers during disasters.

"We now urge House members to bring it on home by voting in support of the bill."

Stallman said it is "imperative that all of agriculture unify behind this farm bill, for the good of the whole of American agriculture, consumers, our hard-working farm and ranch families and the rural communities they support."

National Farmers Union President Roger Johnson said he was pleased with the language of the proposed bill in his initial review.

"I am encouraged to see provisions that benefit family farmers and ranchers in the bill, including approximately $4 billion in livestock disaster funds, retroactively available to those who suffered tremendous losses last October. It increases access for livestock producers to Environmental Quality Incentives Program (EQIP) benefits, along with many other supportive policies for the livestock industry.

"NFU is happy that Congress did not make any legislative changes to the Country-of-Origin Labeling (COOL) law or major adjustments to protections for producers under the Grain Inspection, Packers and Stockyards Administration (GIPSA).

Growers groups comment

National Corn Growers President Martin Barbre praised the conferees who worked on the Agricultural Act of 2014, and said his organization was "especially pleased the legislation provides an adequate and flexible farm safety net as well as a strong federal crop insurance program. The new bill also includes an option for farmers to participate in a modified Agriculture Risk Coverage program."

The American Soybean Association (ASA) issued a statement supporting the bill, "which provides for multiple soybean farmer priorities, most notably a flexible farm safety net that includes a choice between price-based and revenue-based risk management tools and maintains the decoupling of payments under both programs from current planted acreage."

Corning, IA farmer Ray Gaesser, president of the ASA, said this has been a "trying process to be sure," but added that the conferees have produced a framework that will serve the "best interests of soybean farmers."

Gaesser said the bill includes a choice between an ASA-supported revenue program that covers both price and yield losses with county and farm level options, and a price-support program, which allows the optional purchase of insurance coverage under a Supplemental Coverage Option (SCO).

While eliminating direct payments, the proposed measure maintains decoupled farm support programs. This will minimize the possibility of planting and production distortions that could trigger new World Trade Organization (WTO) challenges, he said.

"The bill establishes practical risk management programs that will protect us in difficult times. That's been our top priority from day one," said Gaesser. "But beyond that, we support this bill because it strengthens crop insurance; includes a streamlining and optimizing of conservation programs; funds critical energy and agricultural research initiatives; and invests in the trade development programs that are so critical to the soybean industry.

"The bill is a compromise," Gaesser added. "It ensures the continued success of American agriculture, and we encourage both the House and the Senate to pass it quickly."

Conservation group pleased

Some conservation groups said they were happy to see the proposed bill included their top priority — re-coupling conservation compliance to crop insurance.

Ducks Unlimited said the bill also includes an important regional Sodsaver program to conserve duck-producing lands in Iowa, Minnesota, Montana, Nebraska and the Dakotas. The provisions encourage the conservation of remaining wetlands and grasslands, and provide vital habitat for waterfowl, they said.

"The 2014 Farm Bill is arguably one of the best agriculture conservation bills for sportsmen and ducks that we've seen in a long time," said Ducks Unlimited CEO Dale Hall. "Our nation is currently experiencing a rate of wetland and native prairie loss not seen since the Dust Bowl.

"The proactive conservation programs included in the 2014 Farm Bill will help deter wetland drainage and incentivize the conservation of these valuable lands while keeping working farmers and ranchers on their land."

He praised the conference committee leaders for including more than $1 billion for wetlands and grasslands conservation easements, representing some of the most successful private-lands conservation programs, "providing a voluntary, non-regulatory, incentive-based way for private landowners, farmers and ranchers to protect and restore wetlands and grasslands on their property. The programs had expired and were not accepting new acreage enrollments."

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