Senators introduce revenue-based counter-cyclical program
Jul 27, 2007 11:10 AM,
By Forrest Laws
Farm Press Editorial Staff
As the House of Representatives grapples with how to pass its version of the 2007 farm bill, two Democratic senators have introduced a bill that could replace the House legislation’s commodity programs with a state-based revenue counter-cyclical program.
Sen. Dick Durbin, D-Ill., and Sen. Sherrod Brown, D-Ohio, unveiled their Farm Safety Net Improvement Act at a press conference in Washington. The legislation has the support of the National Corn Growers Association, American Farmland Trust and other farm and environmental groups.
“I think the old-time religion we’ve had on some of the farm bills just really doesn’t apply to the market today,” said Durbin, speaking at a press conference where he was joined by telephone with the leaders of the National Corn Growers American Farmland Trust.
“Sens. Durbin and Brown are helping take farm policy to a new level by introducing legislation that is forward-looking and emphasizes a market-based farm program,” said Ken McCauley, NCGA president. “A revenue-based farm policy is one that corn growers have been advocating for the past year, and we are happy this legislation will hit the Senate floor in the coming weeks.”
“America’s farmers need a real safety net when disaster hits. But the existing subsidy programs are complicated, expensive and leave many farmers unprotected,” says Ralph Grossi, president of American Farmland Trust.
“AFT applauds Sens. Durbin and Brown for introducing their bold, new Farm Safety Net Improvement Act. The act fundamentally transforms risk management programs to provide better protection, less market distortions and equity across crops — all at no additional costs. It is real reform that is better for producers and for the public.”
NCGA has been promoting a county-based revenue counter-cyclical program. Durbin and Brown’s proposal takes concepts in NCGA’s plan and applies them to the state level. The provision would trigger a government payment when a farmer’s actual revenue (price x yield) falls below 90 percent of the forecasted state target revenue for a specific crop.
“While NCGA continues to advocate a county-based revenue program for the 2007 farm bill, the Durbin-Brown proposal is a step in the right direction in reforming farm policy,” McCauley said. “We will continue to work with Congress to pass a farm bill that is fair for all producers while providing a strong safety net.”
The program would integrate private insurance with the state program, operating much like it does now. NCGA is working with American Farmland Trust to promote the revenue-based farm program.
The insurance covers a farmer’s individual revenue losses beyond what the government covers. In doing so, farmers will see a significant decrease in their crop insurance premiums.
The Durbin-Brown proposal most likely will be an amendment to farm bill legislation that comes out of the Senate Agriculture Committee, which is anticipated to begin marking up its version of a farm bill after the August recess.
The House, meanwhile, began its debate of its farm bill Thursday (July 26) night. Votes on a number of amendments were scheduled Friday (July 27).
During the debate Thursday (July 26) night, the House defeated an amendment offered by Reps. Ron Kind, D-Wis., and Jeff Flake, R-Ariz., by a vote of 309-117. The amendment, which contained the representative’s Food and Farm Risk Management for the 21st Century Act, would have removed the primary commodity programs and replaced them with farmer savings accounts.
The amendment drew fierce opposition from many farm organizations that sent letters to all 435 House members, urging them to defeat the Kind amendment and pass the House Agriculture Committee version of the 2007 farm bill.
House members such as Rep. Randy Neugebauer, R-Texas, as the amendment would have removed most of the safety net provisions of the 2002 farm bill when most farmers believe those provisions are working.
“There has been a lot of discussion about ‘reform’ in farm programs. I suggest the so-called reformers out there get better acquainted with the facts,” said Neugebauer. “Farm programs have worked as intended, providing support when prices are low and pulling back when prices are high. Maintaining the farm safety net has cost $21 billion less than was projected in 2002 and comes in at an even lower cost in this bill.”
While pleased that the Kind Amendment was soundly defeated, Neugebauer also expressed disappointment with the midweek turn of events that has threatened bipartisan Farm Bill support.
“When the House Agriculture Committee wrapped up work on the 2007 farm bill last week, both Republicans and Democrats were united in support of the bill,” he said. “The Ag Committee’s bill was bipartisan, and I continue to support the base farm bill the Ag Committee reported.
“However, we learned yesterday that the majority had broken a promise by using a tax increase to pay for additional nutrition entitlement spending. They've also attached tax policies that increase our dependence on foreign energy.
e-mail: flaws@farmpress.com
