Farm Bill: Policy and Budget Issues
Bart Schott, the President of the National Corn Growers Association was a guest on yesterday’s AgriTalk program with Mike Adams, where he talked about the organization’s proposal for the 2012 Farm Bill.
To listen to a portion of this discussion from yesterday’s AgriTalk program, just click here (MP3- 3:14)
Recall that DTN Ag Policy Editor Chris Clayton explained earlier this week that, “The plan follows through on a desire by NCGA members to shift away from direct payments while providing a new overall commodity program that is simpler than the Average Crop Revenue Election program.
“The corn growers unveiled the ‘Agriculture Disaster Assistance Program,’ which would not only replace ACRE, but would also replace the more traditional Direct and Counter-Cyclical Program as well.”
Mr. Clayton indicated that, “The proposal would use harvest prices and establish a five-year Olympic average of farm revenue as the basis for payments. Further, rather than using state yields, NCGA proposes using National Agricultural Statistic Services regional crop reporting districts in each state to set the crop-revenue guarantee. In testimony before the Agriculture Committees, farmers have often suggested using a county yield average, but [Anthony Bush, a Mt. Gilead, Ohio, farmer and chairman of the NCGA Public Policy Action Team] said NASS just isn’t able to get yields that detailed across the entire country.
“‘The problem with going past reporting districts is NASS doesn’t feel they have adequate data for every county,’ Bush said. ‘They feel confident in their data for CRDs (crop reporting districts). That is why we chose to go crop reporting districts.’
“NCGA’s proposal also would make some other tweaks to ACRE. For one, NCGA calls for basing the new program on a farmer’s actual planted acres, not program base acres.”
On the issue of using NASS crop reporting districts to set the crop-revenue guarantee, the USDA’s Economic Research Service (ERS) came out with a report yesterday titled, “Alternatives to a State-Based ACRE Program: Expected Payments Under a National, Crop District, or County Base.”
Although yesterday’s report focuses on the ACRE program, an ERS summary of the study stated in part that, “The Average Crop Revenue Election, or ACRE, program is a commodity support program that bases coverage on aggregate State-level and individual farm-level revenue variability. Changing the level of aggregation from State to one closer to the farm level—Crop Reporting District or county—would generally increase payments.”
Recall that Mr. Clayton’s DTN article indicated that, “NCGA has run the Agriculture Disaster Assistance Program through computer models that project the proposal, as crafted by the group, would cost about 30% less than the current Direct and Counter-Cyclical Program. Few commodities are in a price range to pay counter-cyclical payments, but direct payments cost about $5 billion annually. Projected out over a 10-year congressional budget score, the NCGA proposal saves roughly $15 billion compared to current policies.”