Amid continuing budget concerns and a need to not be caught flat-footed when Congress again takes up a new farm bill, the American Soybean Association has shifted positions on what the new legislation should contain.
The ASA proposes moving away from the Agricultural Risk Coverage (ARC) program it supported in 2012. In ARC’s place, the group would update the Counter-Cyclical Program (CCP) while continuing to support the Supplemental Coverage Option (SCO).
The ASA proposal would also allow producers to choose “higher options” for the two programs, “recognizing that producers in different growing regions have different priorities for protecting farm income,” according to the group.
According to a statement, the ASA would also “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.”
ASA continues to support extending the Marketing Loan Program, eliminating the ACRE program, reducing or eliminating direct payments, and the Senate version of the cotton STAX program.
The ASA proposal comes shortly after the latest Congressional Budget Office (CBO) scores of farm bills offered by the Senate and House last year. The CBO found the bills would cost taxpayers “an additional $8 to $10 billion” over original estimates.
Reached on Capitol Hill Wednesday morning (March 13), where ASA leaders have been rolling out the proposal to lawmakers and staff, ASA president Danny Murphy says the CBO score, “didn’t surprise us. We expected there’d likely be continued budget pressure since the first of the year. We knew there would be continued demands on agriculture to make additional budget savings.”
Murphy, a Mississippi farmer, said the group has been searching for a way to come to a consensus with other commodity groups. “Obviously, there are core principles -- planting flexibility and risk management through crop insurance – that still need to be in the mix.
“As the ASA Farm Bill Task Force worked on the possibilities, eventually the ideas gelled over the last few weeks. It was decided to make a change in our policy – and that was an easier decision once the CBO score showed the ARC coverage was several billions of dollars than was originally projected. It would almost be cost-prohibitive to go with ARC and it reaffirmed the need to come to another solution.”
The ASA proposal, Murphy hopes, “gives the opportunity for some of the Southern crops that favor target price programs to maintain that and provide them what they need. Plus, the SCO (Supplemental Coverage Option) would provide growers the risk management that they feel is so important.
“This bill could be used to accommodate all crops and provide what they need.”
How has the proposal been accepted on Capitol Hill?
“The response has been really good from most of the folks we met with. They felt the ASA had made a step forward and provided an opportunity for ag groups to come together.
“Our big concern is on planted acres – whether the program is on planted acres or decoupled. We really think it needs to be decoupled so things are market-based and you don’t drive plantings based on a government program.”
Any differences among lawmakers based on the region they represent?
Mississippi Sen. Thad Cochran, ranking member on the Senate Agriculture Committee, “was very careful and wanted to make sure this is the direction for (Southern) farmers.
“Jeremy Jack, president of the Mississippi Soybean Association, and Tim Clements, the vice president, are both rice growers, as well. We explained the program to Sen. Cochran and he asked (Jack) if Mississippi growers would support it. Both (Jack and Clement) said absolutely, it is a program they believe will work for them.
“That doesn’t mean there isn’t work to do. We must bring rice on board, corn on board, wheat, peanuts and others.
“And whether this is the exact program that will be the final one, or not, we hope it’s a first step to bring everyone to the table. We must talk about this and figure out where we go from here.”
The message from Michigan Sen. Debbie Stabenow, chairwoman of the Senate Agriculture Committee, “was that she’s been able to hold the line on deficit reduction. She intends to maintain the savings of $23 billion out of the agriculture budget.
“Here’s the thing, though: that’s for this year. If agriculture doesn’t unite and we don’t get a farm bill in 2013, it’s likely all the direct payments will go to deficit reduction and there will be very little money to write a farm bill in 2014. Again, we must unite, find a common message and ask Congress to write a farm bill that works for all of agriculture.”
ASA leaders also met with House agriculture staff and Minnesota Rep. Collin Peterson, ranking member of the House Agriculture Committee. “Some on the House side still want programs tied to planted acres. That means we’ve got negotiations and convincing left to do.”
Were you told by lawmakers when they expect to take the farm bill up in earnest?
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“It appears they’re still waiting for firm budget numbers so they’ll know what’s available to spend. Plus, Easter holidays aren’t far off.
“So, it’s looking like the earliest will be mid-April before one of the agriculture committees might begin marking up bills.”
Murphy and colleagues have already begun outreach to other commodity groups.
“We’re actually talking to some corn and wheat leaders later today. We’ll reach out to the rice, peanuts, cotton over the next few weeks to explain our approach and see where we can go. We just have to deliver a cohesive message.”
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