What is in this article?:
- Senate Agriculture Committee passes farm bill out of committee.
- Vote was 15-5.
- Nutrition program spending creates intense debate.
- Some Midwest lawmakers unhappy with target prices set for rice and peanuts.
Target price push-back
As in the 2012 farm bill passed out of committee, the 2013 version eliminates direct payments and a tab of $5 billion annually. That wasn’t enough for some Midwest Republicans who, harkening back to the regional problems experienced during last year’s debate, repeatedly criticized the target prices put on rice and peanuts.
Most aggrieved was Kansas Sen. Pat Roberts, who began his criticism at the outset of the hearing. “I do not believe this is a reform bill. I believe it is a rear-view mirror bill. Target prices under any name -- whether counter-cyclical payments, adverse market payments or government subsidies -- are proven to be trade and market distorting.
“It is beyond frustrating that a year ago we passed a bill with no counter-cyclical program and real reform. Today, we’re asked to support the new adverse market payment program that just amps up the subsidies and continues target prices for all commodities even though there are areas of the country where we don’t want them.”
Roberts, who had his committee leadership position taken by Cochran earlier this year, continued: “This mark-up not only sets target prices, it raises the guaranteed price level for rice by $2.80 to $13.30 and peanuts jump from the $495 target to $523. These prices are set so high they may cover a producer’s full cost of production, essentially guaranteeing that a farmer will profit if yields are average or above average.”
Roberts’ claims were challenged by Georgia Sen. Saxby Chambliss. “We’re not guaranteeing anybody a profit. The 2008 (farm) bill was the most market-oriented bill we’ve ever seen. All you have to do is look at the reaction of the markets to determine that. We’ve had less payments coming out of Washington under the 2008 farm bill than – and I’m certain (of this) without even doing the research – of any other farm bill in recent memory…
“I understand there are different ideas around this table about what’s the best safety net. I encourage my colleagues to recognize that one program doesn’t fit all. A new program, Adverse Market Protection, seeks to serve the needs of those who aren’t protected by the Agricultural Risk Coverage and crop insurance programs.
“It is imperative that the farm safety net provide protection for multi-year price declines, especially for Southern crops like rice and peanuts…
“I’d also like to recognize that the upland cotton policies contained in the chair’s mark represent fundamental reform in the support provided to cotton farmers. (Those) reforms contribute $2.8 billion in savings towards this committee’s budget target.”
Nebraska Sen. Mike Johanns, a former Secretary of Agriculture under President George W. Bush, “fundamentally disagrees with target prices. Congress should get out of the business of setting prices – that’s why we have markets…
“If we keep telling farmers to plant for prices than are higher than the market, or cover the cost of production, even, they will simply respond to that with an end result of (too much acreage in certain crops) and lower prices.”
Johanns went on to praise the bill’s approach to crop insurance and the “tightest AGI and payment limits of any farm bill I’m aware of. It also makes sure that farmers are actively engaged in the farming operation.”
Not only will the Corn Belt be pleased with bolstered crop insurance, farmers there will welcome a new program aiming to help with less severe losses that don’t trigger crop insurance payments.