Eight House Agriculture Committee members heard testimony from representatives of the Southwest’s major commodity producers at a recent farm bill hearing in Lubbock, Texas, and then questioned panelists on topics ranging from crop insurance to immigration reform.
Crop insurance comments caught Texas Representative Randy Neugebauer’s attention. He said agriculture needs a more flexible insurance program. “The Supplemental Revenue Assistance Payments (SURE) and Alternative Crop Revenue (ACRE) programs are not the answers we thought in the 2008 farm bill,” Neugebauer said.
He said farmers may need policies that provide higher levels of coverage at reasonable prices. He also said that shallow losses provide gaps in coverage. “On a farm of 4,000 to 6,000 acres a shallow loss is a big chunk,” he said.
“We’re not offering producers enough flexibility,” he added. “We have to provide flexibility with more diversified products. Farmers face different issues with each crop. Capital requirements and markets are different.”
Rice producer L.G. Raun and peanut farmer Jimbo Grissom said those two crops may need a different insurance approach.
“We need some sort of price coverage system,” Grissom said. “We’re working with peanut farmers in the Southeast on the issue.”
Panelists were asked about policies that would pay for losses as low as 5 percent. Grissom said a 5 percent loss in peanuts, given the narrow profit margin, could be devastating, especially for young growers. “And older peanut farmers are eating into their equity.”
Ronnie Holt, a Muleshoe, Texas, farmer, crop insurance agent, and Chairman of the Crop Insurance Professionals Association (CIPA), said acceptable loss percentages depend on the grower. “For a young farmer, a 5 percent loss might be too big. We need a flexible insurance option with buy-up potential.”
Representative Collin Peterson, Minnesota, House Agriculture Committee Chairman, said the committee is trying to stretch available dollars. “We want to be as efficient as possible and make funds go farther,” he said.
Representative Mike Rogers, Alabama, asked if producers would be willing to give up direct and counter cyclical payments in exchange for less expensive crop insurance with better coverage. No takers.
“With the direct payment we can go to a banker because it’s a guaranteed income,” Grissom said. “It’s quite a bit harder now to get operating capital. And 90 percent to 95 percent of peanut farmers had carryover debt this year.”
Representative Adrian Smith, Nebraska, asked about regulations on antibiotics in livestock.
Joe Parker, representing the Texas Southwestern Cattle Producers Association, said the livestock industry “depends on a good veterinarian to regulate an antibiotic program for cattle,” including stockers and feedlot animals to maintain health.
“Animal health improves with a good antibiotic program,” Parker said. “Regulation is a big concern.”
Brad Bourma, a Plainview, Texas dairyman, said antibiotic use in diaries is “limited for therapeutic use. The issue should not be controlled by an agency but based on sound science with a good veterinarian.”
“Sound science is the most important aspect,” Parker said.
Bourma said the dairy industry is putting together an industry standard that includes vaccination recommendations and other health issues. “We’re also ready to adopt an animal identification program that will be accountable for our product and transparent.”
Parker said the industry has been “very disappointed in Country of Origin Legislation (COOL). It has done nothing to help prices and is a big burden with relationship to trade.”
Representative Henry Cuellar, Texas, said the fever tick problem in South Texas “is expanding. This can be a problem that affects states outside of Texas, across the South and into the Southeast.”
Cuellar said the fever tick issue is “a border security problem.”
Texas Representative Mike Conaway asked another question regarding border security issues and migrant labor.
“Is the H2A program helping to get labor?” he asked.
Parker said it was helpful but could be made more flexible. “We still have some problems with it.”
He said farm labor needs extend from close to the Mexican border all across the state, and especially with fruit and vegetable and livestock operations.
Pennsylvania Representative Glenn Thompson asked about the estate tax and said “the future of agriculture depends on transitions,” from one generation to the next.
“I’d like to see the estate tax removed,” said Billy Bob Brown, speaking for the Texas Farm Bureau. “But that’s not possible, so we need to get it at a reasonable level to allow families to keep farms intact.”
Brad Heffington, a Lamb County, Texas, farmer, said farmers work all their lives to build their farms, paid taxes all their lives and “at death heirs face the challenge of how to pay the estate tax.”
He said a reasonable tax would allow “transition without having to sell the assets.”
Travis Childers, Mississippi, asked panelists what they needed from a 2012 farm bill, realizing “we do not have as much money.”
Cuellar said the committee would need to “work together and develop a consensus to make it work.”