Barring any unforeseen developments, U.S. farmers will receive their 2006 farm program payments under the same rules that have been in effect since President Bush signed the current farm bill in May 2002.
Some growers may not realize that new regulations that would have cut the maximum direct, counter-cyclical and marketing loan gain payment amounts in half could have been in effect next year if a gaggle of Midwestern senators and environmental organizations had had their way.
When the Senate began voting on Amendment 2359 to the Budget Deficit Reduction and Reconciliation Act of 2005 on Nov. 3, opponents of the group thought they had enough votes to defeat the proposal to place a “hard” $250,000 cap on farm payments. But, in Washington, you never count on anything until all the votes have been counted.
The amendment was quashed on a procedural move when the Senate voted 53-46 not to waive the budget rules so it could be considered. Proponents fell 14 votes short of the 60 needed for the waiver.
“Saxby and I had been in close contact for a week or two before the vote,” said Sen. Blanche Lincoln, D-Ark., a member of the Senate Agriculture Committee, which is chaired by Georgia's Saxby Chambliss. Chambliss led the debate against the amendment authored by Sen. Charles Grassley, R-Iowa, and others.
“We wanted to make sure we did our homework and reached people early,” she said. “The greatest thing about agriculture in this country is its diversity, and we stressed that this idea of a ‘one-size-fits-all’ farm policy could be very disruptive.
“We can't all fit in the mold of an Iowa farmer.”
Sen. Lincoln, who was interviewed the day the Senate Agriculture Committee held a hearing on agricultural transportation and energy issues, said she believes the vote and hearings are coming at a “critical juncture” for U.S. agriculture.
“It's been a very frustrating time for those of us who represent agricultural states,” she said. “A lot of people don't understand that a farmer can't decide the day before what he intends to plant for the season. It takes planning and tremendous investments in land and equipment to be able to farm the way the market forces many of our growers to operate today.”
Opponents of the payment limit amendment used two main arguments to try to persuade senators to vote against the measure, Lincoln said.
“Our producers have to farm with an economy of scale,” she said. “We have bigger farmers, and, when you have that, they will have higher payments. And most of those are going to their bankers — not the farmers — to repay the loans needed to finance them.
“We also said that when our farmers make contracts with their bankers, they have to be able to show they have some assurances they can repay those loans over the span of time. The lender wants to know that if you have two good years and two bad years, you have some way of offsetting the two bad ones.”
Representatives of the major commodity organizations also lobbied their senators to make sure the message — reduced farm payments would be a double blow to many growers — was getting through.
“The Senate vote was a hard-fought victory for rice farmers,” said Paul T. Combs, chairman of the USA Rice Producers' Group, the grower arm of the Federation. “A further reduction in farm program payments limits would adversely affect the majority of U.S. rice producers.”
Combs said rice leaders reminded their senators it would be unfair to change farm policy in mid-stream, given the current economic conditions facing rice producers and much of agriculture.
“We need the stability and predictability provided by farm programs that allow producers to make long-term business plans and provides lenders with the confidence that a strong safety net remains in place,” said Paul Combs, a rice farmer from Kennett in the Missouri Bootheel.
The payment limit amendment, sponsored by Sens. Charles Grassley, R-Iowa, and Byron Dorgan, D-N.D., would have lowered the amount farmers may receive in federal payments from $360,000 to $250,000 and would have reduced the maximum payments farmers could receive by half.
Thus, a grower might find his direct payment capped at $20,000 although he had not been affected by the former limit of $40,000 per person, as Sen. Chambliss noted when speaking against the amendment during a debate on Nov. 2.
“Unfairly lowering farm program payments would disproportionately impact certain commodities and regions,” said Combs. “The U.S. rice industry greatly appreciates the leaderships of Sens. Chambliss and Lincoln and Mark Pryor, D-Ark., and Thad Cochran, R-Miss., for speaking against the amendment.”
All 12 rice state-senators voted in opposition to the Grassley proposal, he noted.
National Cotton Council leaders also praised Chambliss, Lincoln, Cochran, Pryor and Sen. Jim Talent, R-Mo., for helping put together a bi-partisan coalition of senators from across the country defeat the amendment.
NCC Chairman Woods Eastland noted that virtually every commodity and farm organization had urged rejection of the Grassley-Dorgan amendment, which received 66 votes during the battle over the 2002 farm bill.
“The proponents of this amendment are apparently determined to drive a wedge between different segments of agriculture,” Eastland said. “It is especially unfortunate that organizations supporting the amendment misled farmers and the public by asserting that the change would benefit family farmers, when in fact there were no provisions to increase investment in family farms or in the production of food and fiber.”
Instead, the unintended result could have been to dramatically reduce participation in conservation programs as farmers and rural businesses would have struggled to make ends meet in the absence of an effective safety net while costs escalate, he said.
“Besides,” he noted, “USDA would have been hard pressed to implement and administer the new requirements without imposing costly requirements on farmers and disrupting orderly marketing decisions.”
With energy costs having more than doubled in recent months and U.S. farmers at a critical juncture in international trade negotiations, “We can ill-afford damaging changes in payment limitations that will undermine the effectiveness of the 2002 farm bill.
“Chairman Chambliss and the Senate Agriculture Committee developed a set of budget savings that are equitable and ensure the 2002 farm bill continues to be effective for production agriculture. The proposed payment limit amendment discriminates among different sized agricultural operations, changing the field of competition in the United States to the detriment of southern agriculture.”
Eastland said the NCC and other farm groups are urging the House and the House-Senate Conference Committee to reject similar amendments. (The House was scheduled to vote on its version of the reconciliation bill the week of Nov. 7. A group of 28 representatives sent a “Dear Colleague” letter to members of Congress urging to vote against any attempts to change payment limit rules in the legislation.)
Sen. Lincoln said she is hopeful the Senate has seen the last of any more payment limit amendments in this session of Congress.
“We wanted to make sure that we had a decisive win in the vote on the payment limits amendment, and we believe we got that,” she said. “We think senators also have a better understanding of the diversity of our agriculture and that you grow what you're best suited to grow. For our growers, that means crops that are expensive to produce.”
Footnote: The National Cotton Council was instrumental in setting up a meeting between Senate Majority Leader Bill Frist and a group of his west Tennessee farmer constituents in Brownsville in August. Dr. Frist, who had not taken a strong position on payment limits in the past, voted against the Grassley-Dorgan amendment on Nov. 3