Some very informative audio files relating to various aspects of the Senate Farm Bill debate have been posted in the past few days, and due to their aggregate length, it appeared that many readers would not have time to listen to the files.
I have compiled excerpts from some of these audio files that I thought were particularly interesting and have put them together in one audio file, which runs about seven minutes.
Julie Harker of Brownfield reported yesterday that, “Senate Ag Committee Chairman Tom Harkin says he’s concerned about changes to the Average Crop Revenue program in the farm bill passed out of committee last week.
“‘I was not prepared for Senator Roberts’ proposals on that. But I wanted to get the bill moved and I thought, you know, maybe you can live to fight another day and perhaps we can address some of this on the floor.’”
DTN staff writer Chris Clayton filed a report on Friday (link requires subscription), entitled, “Farm Bill Keeps Programs Intact,” in which he outlined some significant differences between the House version of the 2007 Farm Bill and the Senate Agriculture Committee version passed last week.
In part, Chris noted that, “The House and Senate will have to hash out differences between their two ‘optional’ counter-cyclical changes.”
We discussed this aspect of his article in great detail on Monday afternoon.
In addition, be sure to see some of Chris’s articles at The DTN Ag Policy Blog, located here.
By Dan Morgan- Dan is a special correspondent of The Washington Post and a Transatlantic Fellow at the German Marshall Fund of the United States. “Analysis from Washington” is posted exclusively at FarmPolicy.com.
The farm bill approved by the Senate Agriculture Committee last week was a disappointment to those who thought this was the year for dramatic reforms.
But credit the committee for one thing. The inclusion of the Average Crop Revenue plan, even in scaled down form, was a significant event. In concept at least, the ACR is bold, even radical. It may point the way out of the current tangled farm subsidy system, toward a farm program that could win long-term public support.
In effect, the ACR is a step toward a “single payer” approach to protecting farmers from the risks of bad weather and falling prices. Over time it could lead to the dismantling of the current crazy-quilt of farm programs, sporadic disaster aid, and subsidized private crop insurance. In place of that hodge-podge would come a single government-run safety net tailored to supporting farmers in times of true economic adversity.
The modified proposal put forward by Sen. Pat Roberts (R-Kansas), and adopted by the committee, fell well short of that. But even it contains some striking philosophical breaks with the past.
For those farmers choosing to insure their incomes through ACR, there would be no more “non-recourse” loans, the basic pillar of the farm program for seven decades. ACR participants would also be ineligible for “target price” guarantees, a staple of the farm program since the 1960s. Even direct payments, the key innovation of the 1996 Freedom to Farm legislation, would begin to wither away.
That such an option could be approved by the Vatican of U.S. agriculture, the Senate Agriculture Committee, is worthy of note.
The initial proposal by Sen. Tom Harkin (D-Iowa), modeled on one supported by the National Corn Growers Association and key senators from corn states, went even further, striking not just at the philosophical roots of traditional farm programs but also encroaching on the territory of the private insurance industry.
For the first time the government would take on part of the role now played by the private insurers, paying farmers when statewide crop revenues fell below a norm for whatever reason, be it falling prices or bad weather.
Participating farmers would end up paying lower insurance premiums to private companies since the government would be taking on more of the risk. Reduced federal subsidies to the private companies would, in turn, produce savings the government could use to finance payouts to farmers with losses.
Furious lobbying by the crop insurance industry kept those provisions out of the compromise version.
Still, Sen. Saxby Chambliss (R-Ga.), the committee’s top Republican and defender of traditional programs that help southern crops, praised Harkin for “moving us in a direction that hopefully one day will lead to a change in how we do business.”
There are still plenty of reservations inside and outside the Beltway.
In the view of Tom Buis, president of the National Farmers Union, the big weakness of ACR is that payouts to farmers wouldn’t be based on local conditions, but on a formula pegged to a whole state’s crop revenues.
Because conditions can vary so widely within a state – even from town to town – farmers want risk coverage based on local conditions, Buis said. The tried and true commodity loan program fills that bill nicely and few farmers will give it up, he said.
Under ACR, he warned, a drought stricken farmer in western Kansas might get no help if high prices and bin-busting crops in the eastern half of the state pushed the state’s average returns above the floor for ACR payouts.
But what is driving ACR in the Senate now isn’t so much a desire to write good policy as budget considerations.
A decisive factor for including it was an estimate by the Congressional Budget Office that tens of thousands of farmers will sign up, saving the federal government more than $3 billion over the next five years. Senators on the Agriculture Committee were able to assign those savings to nutrition and conservation programs, buttressing support for the overall farm bill when the measure goes to the floor.
“Money drove this,” said a lobbyist who participated in some of the backroom discussions but asked not to be identified.
Buis for one is skeptical that many farmers will opt for ACR. But so far, CBO has stood by its score.
Whether ACR will survive or even be expanded when the farm bill goes to the Senate floor is anybody’s guess.
But even diehard defenders of the farm program acknowledge current policy can’t be sustained indefinitely. It is a bewildering mix of overlapping subsidies that include price support loans, price guarantees, automatic cash payments and subsidized crop insurance. The Senate farm bill will contain yet another component, a $5.1 billion disaster trust fund that Harkin says will benefit mainly a handful of low rainfall states.
Crop insurance subsidies and direct payments alone cost the government around $10 billion a year.
The thinking of those supporting ACR is that the government could use that money to fashion a simpler, less costly, common sense safety net by combining these programs, and eliminating the many loopholes. That’s a “new way of doing business” the American public might well support.
Philip Brasher reported in yesterday’s Des Moines Register that, “The Senate Agriculture Committee approved a farm bill Thursday that offers growers a new subsidy program designed to protect farm revenue in an era of higher crop prices.
“The optional program is a top priority for Midwest corn growers, who stand to get little from traditional crop subsidies that pay farmers when commodity prices fall but not when crops fail. The ethanol boom has kept commodity prices well above subsidy levels.”
(The Associated Press reported yesterday that, “Agriculture futures mostly rose Friday on the Chicago Board of Trade, as corn and soybean prices advanced. [W]heat for December delivery dipped 2 cents to close at $8 a bushel; December corn rose 5.75 cents to $3.72 a bushel; January soybeans rose 0.75 cent to $10.1325 a bushel.”)
Earlier this week, Illinois Senator Richard Durbin (D) joined Todd Gleason of the University of Illinois Extension Service to discuss the markup proposal of the 2007 Farm Bill that passed the Senate Agriculture Committee on Thursday.
In particular, Sen. Durbin focused on issues regarding an amendment offered during the Committee debate by Sen. Pat Roberts (R-Kansas) which altered the Average Crop Revenue (ACR) program. Sen. Durbin indicated that, “I go into this debate believing that my good friend Senator Roberts has taken a roller brush to a Rembrandt. We had a pretty good piece of legislation and the crop insurance industry didn’t like it and made some changes in it.”
The Senate Agriculture Committee began marking up their version of the 2007 Farm Bill yesterday, and according to the Committee’s webpage, work will continue this morning at 9:00 a.m. EDT in Room 328A of the Russell Senate Office Building- live coverage will be available here.
In his opening comments at yesterday’s markup hearing, Committee Chairman Tom Harkin (D-Iowa) stated that, “This is a bipartisan bill that, I believe, will enjoy broad support on the committee. It conforms to a strict budget allocation and pay-as-you-go budget rules, yet still addresses the diverse geographical and philosophical views on our Committee in a balanced way. I would like to thank Chairman Conrad of the Budget Committee and Chairman Baucus of the Finance Committee for their help in making this possible.”
DTN writer Chris Clayton reported yesterday (link requires subscription) that, “Traditional commodity programs would remain comparable to the current farm bill under the proposal that will be considered by the Senate Agriculture Committee Wednesday. [The proposal can be viewed at the Committee’s webpage].
“The chairman’s mark released Tuesday showed minor tweaks in commodity target prices [view old versus new here] and loan rates [view old versus new here], but also adjustments in how farm payments are calculated.
“Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, had planned to unveil himself his chairman’s mark, called the ‘Food and Energy Security Act of 2007.’ But Harkin had to cancel a scheduled news conference on the proposal Tuesday because he was still tied up with floor debate on the funding bill for Labor, Health and Human Services programs. Harkin expected to wrap up that bill late Tuesday so mark-up on the farm bill can begin Wednesday morning.” [The Committee’s webpage indicates that, the 2007 Farm Bill markup is currently scheduled for Wednesday, October 24, at 10:00 a.m. EDT in 328A Russell Senate Office Building- coverage available here].
An update posted at the Senate Agriculture Committee webpage indicated that a press conference, in which the Chairman’s mark of the Farm Bill will be unveiled, is going to be held today at 12:30 p.m. EDT in 328A Russell Senate Office Building. The press conference can be viewed live via the Committee webpage.
DTN writer Chris Clayton reported yesterday (link requires subscription) that, “A pair of U.S. senators said Monday they will bypass the Senate Agriculture Committee and take an amendment to the floor that would put a $250,000 per-farm hard cap on commodity payments.
“Payment-reform champions Sen. Charles Grassley, R-Iowa, and Sen. Byron Dorgan, D-N.D., will take another swing at lowering the payment cap for farmers. Dorgan and Grassley have brought up tighter payment limits in the past and even seen a bill pass the Senate only to lose out in a conference vote.”
On Wednesday, the Associated Press reported that, “European Union subsidies to encourage farmers to grow biofuel crops have reached their annual limit, the European Commission said Wednesday…EU Agriculture Commissioner Mariann Fischer Boel questioned if they were still needed. ‘This payment has been very useful in stimulating the European biofuels sector,’ she said…‘But … next month we will have to ask whether it is still necessary. We now have a binding target for biofuels and a blossoming marketplace.’”
I. Agricultural Economy
II. Farm Bill
III. Energy Issues- Energy Bill, B99, EU Biofuels Incentives
I. Agricultural Economy
A news release issued yesterday by the House Ag Committee stated that, “Today, the House Agriculture Committee held a hearing to review the structural changes taking place in agriculture and their impacts on the farm economy.
“The committee heard testimony from a panel of three economic analysts about recent developments in the farm economy, examining both short- and long-term trends in prices and farm output. The committee also discussed rising input costs from energy prices, rising land and labor costs, and the effects of new product development like biofuels.”
Brownfield writer Peter Shinn reported yesterday that, “Senate Agriculture Committee Chairman Tom Harkin of Iowa said Wednesday he had reached a deal with Budget Committee Chairman Kent Conrad of North Dakota and ranking Agriculture Committee Republican Saxby Chambliss of Georgia on the Senate version of the farm bill. That means the Senate Ag Committee will mark-up its version of the farm bill next week.
“According to Harkin, highlights of the measure include an extra $4.2 billion for nutrition, an additional $1.3 billion for cellulosic ethanol research and development, and a $4 billion increase in conservation generally plus $1.2 billion for the Conservation Stewardship Program, currently known as the Conservation Security Program (CSP). That additional funding, Harkin said, would allow him to meet his previously stated goal of getting 80 million acres enrolled in CSP by the end of the next farm bill.”
The Brownfield article also included an audio link to Chairman Harkin’s complete press conference from yesterday, to listen, just click here (MP3 – about 20 minutes).
Dow Jones writer Bill Tomson reported yesterday that, “The Bush administration will most likely appeal a recent World Trade Organization decision that the U.S. has not done enough to comply with an earlier WTO ruling that the U.S. needs to scale back subsidies for cotton farmers, U.S. Department of Agriculture Under Secretary Mark Keenum said Tuesday.