- Texas could see a significant reduction in the baseline.
- Texas corn producers would not have an adequate safety net if prices for corn, during the life of the 2012 Farm Bill, were to fall below CBO projected prices.
- The Senate committee's proposed farm bill has loan rates at the 2002 level, which is significantly lower than the cost of production for corn producers.
The Corn Producers Association of Texas has expressed appreciative for the efforts of the Senate Committee on Agriculture, Nutrition and Forestry on the 2012 Farm Bill by passing legislation from the committee today; however, the organization says the current bill poses some serious concerns for Texas producers.
A CPAT statement reports that Senator Saxby Chambliss (R-Ga.) spoke on the disproportionate impact the presented Commodity Title of the bill has to varying regions across the nation. “CPAT concurs with Sen. Chambliss' sentiments in this regard, as do Chairman of the House Ag Committee Frank Lucas (R-Okla.) and Rep. Michael Conaway (R-Texas) in statements released in response to the Senate committee's passing yesterday,” the statement said.
“As the bill is written, the state of Texas could see a significant reduction in the baseline. Texas would face a 42 percent reduction in baseline based on the committee's originally presented bill. While this percentage has likely changed due to some … adopted amendments, the state still faces a substantial reduction.”
CPAT Executive Director David Gibson said the organization had the Agricultural and Food Policy Center at Texas A&M University analyze the bill presented by the Senate committee prior to the markup, which shows Texas corn producers would not have an adequate safety net if prices for corn, during the life of the 2012 Farm Bill, were to fall below CBO projected prices.
"A safety net reference price for corn and other grains could be added to the bill at levels close to the cost of production for corn farmers at no additional CBO score to the bill," Gibson said. "We hope the committee will reconsider this option as the bill moves forward."
Additionally, the Senate committee's proposed farm bill has loan rates at the 2002 level, which is significantly lower than the cost of production for corn producers. CPAT urges this proposal to be revisited in further discussions during the farm bill process.
Crop insurance is important to corn producers in Texas, but making crop insurance the key focus of the Agriculture Risk Coverage (ARC) plan, as adopted by the Senate committee, puts many Texas producers at a disadvantage. Some Texas producers cannot buy higher levels of insurance that farmers in other states can buy, and Texas farmers currently pay a higher premium for the lower levels they have the option to purchase. This leaves a larger risk margin for our state's producers than the ARC plan was designed for.
Further, the proposed payment limit is a tremendous setback for producers, as it is not equitable based on the cost of production for both large and small family farms. This bill set the limit lower than that in the Agricultural Act of 1970, which established the first payment limit.
"Our nation's producers have enhanced their operations—developing new technologies and management practices to better utilize resources to grow crops and raise livestock, providing food for the world's growing population," Gibson said.
These innovations enable each farmer to feed approximately 155 people per year, compared to 73 people per year in 1970. However, these factors, combined with increased input costs such as energy, transportation, implements and fertilizer, have driven up the cost of production, further emphasizing the need for an equitable payment limit than one set more than 40 years ago.
As with any legislative proceeding, CPAT understands there are both pros and cons; however, this piece of legislation is a disappointment for producers who were hopeful of having a farm bill passed through Congress this year.
"This bill was specially designed for a crop or two grown in one region of the country and it will not become law," Rep. Conaway stated following the Senate committee's passing of the bill. "Today was a big step backward in completing a farm bill this year."