Reaction of commodity and farm groups to the April 20 release of a Senate Agriculture Committee draft farm bill has been mixed. Several sectors of Southern agriculture are especially critical of the proposed legislation.

For more on the draft, see here.

Jeffrey Hall, who works legislative affairs for the Arkansas Farm Bureau, says while there was much discussion about creating the farm bill last fall during the “super committee” process, the draft’s release “was the first time the public, commodity organizations and others actually had the opportunity to see legislative text.” The Senate Agriculture Committee’s 900-page draft farm bill “actually kicked off the first formal step in this long process.

“Looking at that, we don’t feel what has been put forth will provide an adequate safety net for Southern agriculture. We have some concerns with the direction the bill goes.”

Those concerns resulted in an April 23 letter to the Senate Agriculture Committee asking for a delay in the proposed bill’s mark-up until “at least after the upcoming recess.” The letter – sent by a group of over 40 agriculture-related organizations – says the “first blush impression is that the mark raises serious equity issues and grave concerns over planting distortions. We share in the committee's strong desire to produce an equitable bill that avoids the scenario in which the farm bill is driving planting decisions. By providing additional time for (committee members) and producers to fully analyze all the impacts of the proposal, the committee can help avoid this result.”

For the full letter, see here.

While the American Farm Bureau Federation (AFBF) hasn’t given a full-throated endorsement of the Senate draft, it has provided encouragement for several things that Hall says would be detrimental to Southern producers. This criticism will come as no surprise as Farm Bureau offices in Arkansas, Louisiana and Mississippi have dissented from AFBF farm bill policies passed at the organization’s annual meeting in January.

Note: Although members of AFBF, state Farm Bureau offices operate independently.

For more, see here and here.

Why the dissent?

“The problem that the three states have in common is we’re heavy in rice and cotton,” said Hall in mid-March. “Also, we all have a lot of irrigated acreage. We have different issues with irrigated corn than the Midwest, which doesn’t irrigate (like the Mid-South does).

“The common thread for the three states was the ‘catastrophic deep loss’ proposal that AFBF has been talking about, the two policies passed at the convention (concerning that proposed) safety net program. We’ve run the numbers with University of Arkansas economists and it won’t provide the kind of safety net that our farmers feel they need to stay in business.

“It’s tough to write a farm bill during a time of high prices. We write them for the difficult times. But we must create a program that protects farmers during those difficult times. We don’t feel that the ‘catastrophic deep loss’ program adequately does that.”

Despite reservations from Southern states – which were again expressed during a Monday conference call with the organization’s board of directors -- AFBF President Bob Stallman sent a letter (scroll down to see full text) to the Senate Agriculture Committee urging the draft be used “as a vehicle to move the farm bill to the Senate floor in a timely manner.” Perhaps as a nod to Southern concerns, AFBF also stated the draft has room for improvement and needs refining.

Hall, who spoke with Farm Press on Monday afternoon, said the Senate plan would “eliminate direct payments, counter-cyclical programs as well as ACRE and the SURE programs that affect crop producers. It would create ‘shallow loss’ or ARC (Agriculture Risk Coverage Eligible Acres) and we have concerns about how that would protect rice and irrigated crops grow in the South.”

The $23 billion proposed savings through the “super committee” process remain intact in the Senate Agriculture Committee’s draft.

“There are some other changes we have concerns with on the conservation compliance issues,” said Hall. “Those are linked to the new ‘shallow loss’ and marketing loan program but not to crop insurance.

“The marketing loan does stay intact in this bill and keeps the same loan rates for all the commodities except cotton. I believe that cotton, with the STAX program (Stacked Income Protection Plan), may see reductions in the loan rate.”

For more on STAX, see here.

Specifically for rice, where do things stand?

“Under this first draft, rice and peanuts are the two commodities that would have the amount of protection reduced drastically,” said Hall. “The bill would mandate the USDA to establish an insurance program by 2013. (The USDA’s Risk Management Agency) is already creating that product for rice and peanuts.  

“The initial analysis of what this draft bill provides for the rice industry shows it would cut 70 percent of its baseline.”

The Senate approach to Adjusted Gross Income (AGI) would be another major change.

“The last farm bill had ‘farm’ and ‘non-farm’ categories -- $750,000 and $500,000, respectively,” said Hall. In the draft, “‘farm’ and ‘non-farm’ are combined and the total is dropped to $900,000.

“The payment limit didn’t change anything on eligibility. However, it changes the payment limits to $50,000 under the ‘shallow loss’ program. That’s a $50,000 payment limit for you and/or a spouse.

“With the size of the operations in the South that would be problematic -- a drop in the bucket.”