A counter-cyclical farm policy would provide farmers with a better safety net than is available under current programs and would be simpler for both farmers and government administrators.
That's the argument the National Corn Growers Association is making to Congress as debate on the next farm bill begins.
“The counter-cyclical program will set a national value for the U.S. corn crop,” says Scott Averhoff, an Ellis County, Texas, grain producer and member of the Texas Corn Producers Board.
“Any time the national value drops below the target, counter cyclical payments kick in to anyone who receives AMTA payments,” he says.
Farmers will receive payments on base acreages established over a five-year period, says Jackie Klippenstein, director of public policy for NCGA in Washington.
Klippenstein says the counter cyclical program offers a more equitable program than the current policy.
“The way the program works now, some farmers receive much less than others because of the way PCP values vary from county to county. Growers in Texas, for instance, received about 40 cents per bushel less than they should have gotten for last year's crop.”
The market assistance program currently in place, she says, “has a lot of problems, including out-of-date loan rates. The way the program is implemented and the way the PCP is set, makes the program inequitable,” she says.
The counter-cyclical proposal, offered during a late April hearing, simplifies the process, Klippenstein says. “A farmer will make fewer trips to the USDA office and will have less paperwork.”
“Any time the national value drops below the target, counter cyclical payments kick in to anyone who receives AMTA payments.”
She also says the program will be more acceptable to U.S. trading partners. “This program moves payments out of the amber box, which will soon reach its cap, into the green box, which is more favorable to international trade.”
Klippenstein also says farmers with established corn bases are not obligated to plant corn to qualify for payment. Farmers may idle land or plant alternative crops and still be eligible to receive counter-cyclical payments if the national value drops below the target price.
“This program gives farmers the option to deal with economic forces,” Klippenstein says.
“With this policy, farmers can be less concerned with yields than with other production factors, such as quality or value-added crops,” she says. “There is no incentive from the program to produce more bushels.”
She says the revamped crop insurance program should remain the primary tool to recoup production losses. “NCGA strongly supported crop insurance changes,” she says. “Farmers should work with that program to augment the counter-cyclical policy.”
Reception from Congress for the proposal, Klippenstein says, has been positive. “They seem to appreciate new ideas,” she says. “Other commodity groups are taking a look at our proposal as well, to see how it will affect their growers.”
The counter cyclical program would include cotton, corn, grain sorghum, rice and other major commodities, she says.