FarmPolicy

December 19, 2018

Farm Bill Issues

Categories: Farm Bill

Farm Bill- Direct Payments

DTN Ag Policy Editor Chris Clayton reported on Friday that (link requires subscription) that, “Congress should eliminate direct payments, and the Average Crop Revenue Election program should be based on county, rather than state, yields and revenue, Iowa Farm Bureau delegates stated Friday.

“The group’s two-day policy meeting ended with members backing a resolution that the farm bill should ‘provide a dependable, fiscally responsible safety net for farmers.’ But the group took the major step of proposing the elimination of the $5.2 billion direct payment program. ‘Direct payments should be replaced by using this money for an improved revenue insurance program and risk management and fair trade,’ the resolution stated.

“Further, the group’s policy stated that the risk management program needs to be better coordinated to avoid gaps and reduce redundancy. In particular, the group stated that the ACRE program would work better if it were based on county yields and revenue triggers rather than the current state yield and revenue triggers.”

After more detailed analysis, Friday’s DTN article indicated that, “The Iowans also recognized that they face battles in regional differences over the farm bill with Southern farmers who grow cotton and rice that will surely arise at the AFBF annual meeting [see related graph]. So the group added language that they want programs that improve the safety net for all farmers.”

O. Kay Henderson reported on Friday at RadioIowa Online that, “The Iowa Farm Bureau’s delegate assembly has endorsed the idea of replacing direct government payments to American farmers with a new system that would use government subsidies for a ‘revenue assurance’ program that would provide insurance against crop and livestock losses.

[Iowa] Farm Bureau president Craig Lang says that kind of risk management could be the new ‘safety net’ for American farmers. ‘The discussion around the Farm Bill lasted nearly three-and-a-half hours and we heard everything from improving the safety net towards what if we took the Farm Bill away and food prices increased and we had amendment after amendment, but during all that discussion, the change on direct payments stayed in,’ Lang says. ‘And I really think that was driven by our farmers’ concern about the growing federal deficit.’”

Ms. Henderson noted that, “Lang admits the idea may not be popular in other areas of the country. Cotton farmers, for example, are ardent supporters of the direct government payment system.”

Dan Piller reported on Saturday at the Green Fields Blog (Des Moines Register) that, “[Iowa Farm Bureau president Craig] Lang said the [direct] payments have become harder to defend, a sentiment echoed by U.S. House Agriculture Committee Chairman Collin Peterson, D-Minn., during the first hearings earlier this year on the 2012 bill.”

(Note that a FarmPolicy.com overview of the House Agriculture Committee hearings on the 2012 Farm Bill can be viewed here.)

An update by Ken Anderson that was posted on Saturday at Brownfield stated that, “Delegates debated the idea of ending all federal farm programs, but those resolutions were rejected. Resolutions passed by the Iowa Farm Bureau will be forwarded to the American Farm Bureau for consideration at the group’s annual meeting in January.”

The Brownfield link also included an audio replay of a discussion between Mr. Anderson and Craig Lang.

To listen to a portion of the Brownfield interview, just click here (MP3- about two minutes).

Farm Bill- Nutrition Issues

Meanwhile, Natalie J. Ostgaard reported on Friday at the Crookston Times Online (Minnesota) that, “Youngquist Auditorium on the University of Minnesota, Crookston campus was nearly filled Thursday morning as U.S. 7th District Rep. Collin Peterson and U.S. Sen. Amy Klobuchar hosted a public meeting to address the concerns of constituents in the area, which were primarily geared toward agriculture.”

The article noted that, “Peterson said he has an issue with the government’s broad definition of a farmer, that you could have $1,000 of ag-related sales a year to qualify as one.

“‘So if you have a horse you could sell for $1,000 or more, you’re a farmer,’ he said. ‘I think this misleads the public. We’ve got a lot of hobby farmers who don’t do this for a living. The problem is, programs are geared toward this inflated number of farmers, 2.2 million, when we really only have about 350,000.’

One of the things he’d like to change is direct payments to farmers, which ‘could be better utilized in crop insurance and a better safety net so that when you have a bad year, you have better protection, but in good years you don’t need money from the government,’ said Peterson.”

Friday’s update pointed out that, “Peterson said he would also like to take pop, candy and other junk food out of the food support program, which would help to address the growing obesity problem in the nation. ‘I don’t think we should be using taxpayer money to buy that kind of stuff for people,’ he said.”

***

With respect to nutrition and obesity as variables in the 2012 Farm Bill debate, recall that Professor Robert Paalberg stated at a May 13 House Agriculture Committee hearing in Washington, D.C. [ see related article, “Ban sugary soda from US food stamps- food expert“] that, “A USDA study in 2008 found that the price of fruit and vegetable products in the United States, if you control for quality and season of the year, had fallen at almost exactly the same rate as the price of chocolate chip cookies, cola, ice cream, and potato chips. Nor is it true that Federal programs make corn artificially cheap for livestock producers. The corn program in the farm bill may lower prices slightly (by less than ten percent), but this effect is more than offset by Federal subsidies and mandates for corn-based ethanol, which drive up the price of corn, and also soybeans. Nor is it true that sweeteners have been made artificially cheap by our commodity programs; our tariff-rate quotas on sugar imports drive up all sweetener prices (and this further boosts feed prices, by diverting corn use to the production of high fructose corn syrup). Nor is it true that HFCS is more obesity inducing in drinks than natural sugar; HFCS in soft drinks consists of 55 percent fructose and 45 percent glucose, not significantly different from ordinary sugar, which is 50/50 fructose/glucose.

So the alleged links between the farm bill and obesity are largely bogus, but they are nonetheless becoming a more powerful political current, one that could make a business-as-usual farm bill more difficult to enact in 2012.” (See official transcript at page 175).

Dr. Paalberg added that, “Subsidizing food give-aways, even healthy food give-aways, has never been a credible policy response to our obesity crisis. Nor is it any longer sustainable within our new budget limits. In the Senate, recently, the Agriculture Committee passed a child-nutrition bill with an added $4.5 billion in spending that had to be financed in part through cuts in EQIP spending.

A better approach would be to stop using the SNAP program to subsidize consumption of unhealthy products. Caloric soda, which is not a food, might be made ineligible for purchase using SNAP benefits (along with various other products such as alcohol, cigarettes, and pet food). Removing the soda subsidy from the SNAP program would help correct the impression that our nutrition programs are hostage to the interests of beverage industry.” (See official transcript at pages 175-176).

In a related article regarding nutrition and the Farm Bill, Karen Auge reported yesterday at The Denver Post Online (“Spoiled system: Eating healthier comes with a price for families”) that, “As Revisha Martinez pondered the cost of peaches and watermelon at her local King Soopers recently, she became the last stop in a complicated food-production system that critics believe has turned healthy eating into expensive eating.

“If Martinez wants each member of her household to have one peach, it’ll cost her about $3.

“If she chooses Kraft macaroni and cheese, she can get 18 servings — with 400 calories and 580 milligrams of sodium in each — for the same price.”

The article stated that, “The reasons fresh fruits and vegetables are so pricey compared with processed food in a carton are a complicated stew of government subsidies, politics and the whims of Mother Nature.

But their combined might, say critics pushing for a change in the way money is doled out, moves us away from fruits and vegetables and toward meat, dairy products and the sugar- and sodium-loaded processed foods for which crops like corn and wheat serve as the raw ingredients.”

The Denver Post article explained that, “But not everyone believes subsidies alone explain the cost of food in the produce aisle.

“‘Commodity supports for soy and corn and wheat, etc., are not necessarily the reason why those commodities are priced lower in the market,’ said Ray Gilmer, vice president of communications for the United Fresh Produce Association, a trade organization that represents fruit- and vegetable-growers. ‘You have to look at the cost of production,’ he said.”

Yesterday’s update noted that, “Unlike corn and wheat, spinach and tomatoes can’t sit in silos indefinitely, he said. Fruits and vegetables destined to be sold as fresh produce often have to be hand-picked.

“Harvests are subject to weather, he pointed out. ‘And a 25-pound carton of tomatoes could be $6 or it could be $20,’ he said.

His group has focused on gaining support for research that could help lower the costs of growing produce or fighting pests, and for programs to help growers market their product, Gilmer said.”

And in related analysis of the price of food and policy issues, see this recent essay by Ohio State University Agricultural Economist Luther Tweeten, titled, “Is There a High Cost of ‘Cheap Food’ Policies?

In other Farm Bill related developments, a news release Friday from Rep. Scott Murphy (D-New York) indicated that, “On Tuesday, September 7th, Congressman Scott Murphy and Congressman Collin Peterson, Chairman of the House Agriculture Committee, will host a Farmers Roundtable with farmers and members of Murphy’s Agriculture Advisory Committee at the Kings Ransom Farm in Saratoga County.

“Murphy invited Peterson to once again join him in the 20th Congressional District to hear directly from members of the agricultural community and discuss the upcoming Farm Bill as well as what can be done to help to help farmers in Upstate New York.”

And Marc Heller reported on Thursday at the Daily Courier-Observer Online (New York) that, “The chairman of the House Agriculture Committee will visit a dairy farm and a poultry farm in Northern New York Sept. 7, accompanying Rep. William L. Owens, D-Plattsburgh.

“Mr. Owens’s re-election campaign announced the visit by Rep. Collin C. Peterson, D-Minn., on Tuesday, reflecting the political benefit of bringing the House’s top lawmaker on farm policy matters to the region ahead of next year’s rewrite of federal farm policy.”

Keith Good

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