In an effort to resolve longstanding differences on new farm legislation and address higher projected costs, the American Soybean Association (ASA) has announced it will support a 2013 farm bill which includes updating and extending the current Counter-Cyclical Program (CCP).

ASA will continue to support the Supplemental Coverage Option (SCO) included in both the House and Senate versions of last year’s farm bills as a complement to federal crop insurance.

ASA will also support offering a choice between “higher options” for these two programs, recognizing that producers in different growing regions have different priorities for protecting farm income.

ASA President Danny Murphy, a soybean farmer from Canton, Miss., stated that “ASA strongly supported the Agricultural Risk Coverage (ARC) program in the Senate bill last year as an effective risk management tool designed to work with crop insurance.”

However, Murphy said, “because of ARC’s higher cost and the need to find additional savings in the farm bill, we have decided to support updating and extending the CCP program included in current law.” Murphy added that “the decoupled CCP allows producers to respond to market signals rather than government programs in making their planting decisions, which has been a key priority for ASA during the farm bill debate.

“It also provides a safety net against several years of low prices, which has been important to supporters of the House bill.”

Murphy added that “the SCO will provide revenue protection at the county level and is more defensible because, like crop insurance, it requires farmers to pay part of the cost of the premium.”    

Earlier this month, the Congressional Budget Office (CBO) found both the Senate and House bills to be more expensive than it estimated last year.

While the savings required for deficit reduction under any Congressional budget agreement have yet to be determined, the Agriculture Committees would need to find an additional $8 to $10 billion to achieve the same level of savings provided under their original bills.

Under its proposal, ASA would set Target Prices under the CCP at levels that reflect an average of recent market prices.

Payments under the CCP are based on the underlying crop acreage bases on a farm rather than on current-year plantings. This is important in the event prices for commodities fall below their Target Prices, which would otherwise become a factor in planting decisions and could distort production.

ASA’s support for a price-based program is contingent on decoupling program payments from current year production to avoid planting distortions.