The message could not have been clearer: Farmers like the current farm program and urge Congress to either extend it or use it as the base for a new one.
Twelve members of the House of Representatives Agriculture Committee seemed to get that message following a recent field hearing in San Angelo, Texas.
“I think the 2002 law works well,” said Colin Peterson, Minnesota, ranking minority member of the committee. “The testimony I've heard in Texas shows a lot of commonality with what I hear in Minnesota.”
In addition to maintaining the 2002 farm program, farmers and ranchers testifying before the committee also urged Congressmen to include a “permanent disaster title” in the next farm bill.
“We need that,” Peterson said. “We did not get it in 2002.”
Committee chairman Bob Goodlatte, Virginia, said he agreed with Texas producers' testimony on payment limits. He also assured them that the next farm bill “will be written by Congress, not the Secretary of Agriculture and not Geneva. We will not write a farm bill that will unilaterally disarm agriculture in trade talks,” he said.
Eleven farmers and ranchers, representing cotton, peanuts, wheat, corn, rice, grain sorghum, cattle, sheep, goats, dairy and sugar, urged the committee to maintain the safety net included in the 2002 law.
Al Spinks, a cotton farmer from Midland, Texas, said the 2002 farm bill “works well and provides a safety net, affordable crop insurance and counter cyclical payments, and the marketing loan protects us against low prices. Because of this program, we've been able to stay in business despite drought.”
Spinks urged the committee to include a permanent disaster provision in the next bill. He also said payment limits would “adversely affect” farmers. “We see an annual attempt to impose more payment limits on agriculture benefits and eligibility.”
Spinks and others urged Congress to develop an alternative energy program. “Alternative energy solutions should be pursued aggressively,” he said.
Jack Norman, president of the Texas Wheat Producers Association and a farmer from Howe, said the 2002 farm bill works well but argued that wheat does not fare quite as well as other commodities. “Wheat farmers can't take full advantage of the commodity title,” he said. “The target price is too low. In a crop shortage, higher prices means low support payments. The program could be more flexible.”
Norman recommended raising the target price to $4.40 per bushel. “Also, we need to improve risk management opportunities. Currently, a disaster in a wheat crop leaves a 35 percent gap in coverage.”
Rickey Bearden, immediate past president of Plains Cotton Growers Inc., and a cotton producer, said the current farm program provides a good safety net but “does not guarantee us a profit.”
Bearden said USDA should reconsider how they define a farm, currently described as any operation with $1,000 in gross sales per year. That definition, he says, fuels farm program detractors who object to a small percentage of the nation's farmers receiving 80 percent of program benefits.
“Only 34 percent of the country's farms are commercially viable operations,” Bearden said. “But those farms produce 90 percent of the commodities that receive government support.”
He also urged the committee to maintain the marketing loan program, which has been singled out for elimination by the Bush administration. He said eliminating the marketing loan should be “out of the question.” All panel members listed the loan as a top priority in any new farm bill.
Dee Vaughan, representing Texas corn growers, produces corn, wheat, sorghum, cotton and soybeans near Dumas. He said the 2002 farm program “saved tax dollars.” He said the program allowed corn growers to update counter cyclical payments but left the loan deficiency payment yield too low.
Vaughan recommended that the committee address the increased cost of production in the next farm bill debate. He also suggested that conservation programs remain as cost share agreements.
Vaughan said USDA's economic data reporting system needs revision, especially in the way the agency reports farm income. “They take farm income and off-farm income and lump them together into household income.” That procedure is misleading, he said.
Dale Artho, a grain sorghum producer from Wildorado, Texas, said the House Agriculture Committee is “our champion in Congress. We encourage you to do the right thing and stay the course,” he said.
He recommended tweaking the farm program to eliminate problems with inter-agency delays in administering disaster assistance. He said permission to allow cattle to graze on CRP land during a drought or following a wildfire “should not take 30 days.”
He said grain sorghum offers an ideal option for addressing the nation's energy dependence.
He also championed U.S. agriculture as a foundation for national security.
“I don't think taxpayers subsidize me,” he said. “I think I subsidize taxpayers. The country uses me as a defense contractor, but they don't pay me.”
He said the claim that land prices are too high is “a bunch of bunk.” Land prices in rural Texas, he said, provide the basis for education, health and farmers' retirement. “My retirement is not a 401(k); it's my land,” he said.
Daniel Berglund, a rice farmer from Wharton, Texas, said decoupled payments hurt the Texas rice industry. “We're basically tenant farmers,” he said. “Decoupling has resulted in huge losses in rice acreage.”
He explained that payments that do not require production allow landowners to take land out of rice production and still receive payments. They convert acreage to recreational or other use. Berglund said rice acreage has dwindled to 150,000 acres.
He said payment limits also create severe problems for rice farmers. “Many rice growers reach payment limits with 200 acres to 250 acres. That's not a viable operation,” he said.
Berglund said rice is a unique crop, requiring different soils and production practices than other program crops. “And in rice areas, we have few other options.”
He's concerned about WTO negotiations. “A number of countries likely will claim rice as a sensitive product,” he said. “That will limit export potential.
“Currently, we export 50 percent of our rice crop,” Berglund said. “Access to foreign markets is vital and we need additional export markets.”
James Overstreet grows peanuts and vegetables in Frio County.
“The current program works fairly well,” Overstreet said. “It could do a lot worse and that's what I'm concerned about.”
He said changes in the peanut program have worked well, for the most part, but argued that the national posted price for peanuts is shrouded in mystery and undermines peanut exports. He explained that the peanut program stipulates that the Secretary of Agriculture will “set the national posted price at a rate that would ‘allow peanuts produced in the United States to be marketed freely and competitively, both domestically and internationally.’”
Overstreet said only a portion of that stipulation is being implemented. “We are freely and competitively competing in the domestic market, but because of USDA's price calculations, we have lost 54 percent of our export sales.”
He said a more transparent method of administering the national posted price would allow the industry to “improve decision-making for planning purposes. We need an approach that is easily understood and of use to the peanut industry.”
Overstreet also urged the committee to correct “an unfortunate omission in the 2002 bill,” which allowed government payment of storage and handling costs to expire effective Aug. 1, 2007.”
He supports an extension of authorization for handling and storage cost payments and said those costs should be part of any future farm bill.