What is in this article?:
- House debate on new farm bill continues.
- Amendment opposed by Southern agriculture interests -- especially rice and peanuts -- withdrawn.
For rice, said Kind, the program would pay out $14 per hundredweight, while the current price is at $10.50. “It’s outrageous that while we’re cutting over $20 billion in the Nutrition Title, we’re adding on this high target price … in an area where it isn’t economically needed or feasible. Since farmers receive these payouts on planted acres, we’re encouraging them to overplant and plant on marginal lands that probably wouldn’t be brought into production anyway because their losses would be covered and a profit margin assured.”
Gibbs, pointing to his farming credentials, said producers “want their check to come from the market, not the government. My fear is the House farm bill will distort the market prices by setting the target prices too high.”
As for corn, “we had a drought and saw prices reach very high levels,” said Gibbs. If there are several years of good weather, “it’s possible we could see the prices of corn come down below these very high target rates and farmers would still be making money on a per-bushel basis, depending on yield. Yield has to be a factor. When you have Price Loss Coverage, yield isn’t factored in. When they can still be making some money on a per-bushel basis per acre and still get a government payout, it is market distortion.
“It is interesting to note that the organizations that support my amendment – the National Corn Growers Association, the American Soybean Association, and many national and state organizations – represent thousands of farmers out there supporting my amendment. It would cut $12 billion from the committee-marked bill. … They don’t want to go back to the previous policies of 1995 where we had market distortion and farmers planting for the program.”
The aforementioned letter takes on the reason for some commodity organizations backing the amendment. The groups “also support the Senate ARC program, which effectively guarantees the profits of corn and soybean farmers, or 88 percent of their historically high revenues. What’s more, these same commodity groups enjoy a government-mandated demand for their crops (the Renewable Fuel Standard), the highest levels of net farm income over the last five years and the highest participation rates of crop insurance in the country.”
Another concern: the WTO. Kind brought up the WTO complaint from Brazil on cotton subsidies and worried the proposed PLC program would set up another challenge.
Gibbs was on the same page. “When we changed this direct benefits paid to planted acres, that’s ripe for a WTO complaint. It could (cause) a trade war.”
Lucas, who adopted a calm demeanor throughout the long day of debate, requested that Gibbs withdraw the amendment, “with my commitment that we’ll continue to work on this issue as we move forward to produce an equitable and market-oriented farm bill.”
With that Gibbs “respectfully” withdrew the amendment.
Following the withdrawal, a coalition of groups that favored the amendment released a statement that read: "Our collective groups believe the Gibbs amendment would have received strong support on the House floor, and would have made the 2013 farm bill a better piece of legislation overall. As proponents of market-oriented farm policy, we are disappointed to see the amendment withdrawn and we thank Rep. Gibbs for his continued advocacy. We expect Chairman Lucas to respond to the farm policy concerns raised by the amendment during Conference on the farm bill, as he committed to do during his colloquy today with Rep. Gibbs. The final farm bill must be more equitable and market-oriented than the current Price Loss Coverage program in the House bill."