The newest farm bill may be less than two years old – and is yet to even be fully implemented – but the House Agriculture Committee is already set to take on the next. During an April 16 press conference, Minnesota Rep. Collin Peterson, chairman of the House Agriculture Committee, said a handful of pressing issues had moved him to push those with an interest in the coming legislation to begin thinking about the “broad picture of how they perceive the current (farm) bill working, or not, trends they see in the future and things we should be considering. … One of the reasons to kick this off early is to get people thinking ahead of time.”
Towards that end, the House committee will hold a hearing on April 22 with USDA Secretary Tom Vilsack and “a panel of experts and economists.” That will be followed by late April/early May field hearings in Des Moines, Iowa; Boise, Idaho; Fresno, California and Cheyenne, Wyoming. A second set of field hearings in Georgia, Alabama, Texas and South Dakota will begin in mid-May.
A second focus for Peterson: regulation of the U.S. financial system.
“We’re waiting to see the (financial regulation) proposal, or draft, out of the Senate Agriculture Committee. … We’re ready to go to conference whenever the Senate moves the bill over. That’s something our committee has been kind of ahead of the curve on and we’d like to get this wrapped up.”
Editor’s note: the Senate Agriculture Committee released its finance oversight proposals shortly after Peterson’s press conference.
Further action on the Cuba travel/export bill “could come up in late April or the first part of May. We’re in the process of nailing down the last couple of votes to move it out of committee and it looks like we’ll get there.”
On April 6, shortly before Brazil was to retaliate against the United States for government payments to U.S. cotton farmers, a preliminary deal stalled the trade-related action.
Allowed to retaliate by the World Trade Organization, Brazil — which brought the case against U.S. cotton in 2002 — was expected to raise tariffs on U.S.-made products besides cotton. On the list of over 100 products: electronics, cars and pharmaceuticals.
“The two critical aspects of the agreement,” said Eddie Smith, National Cotton Council (NCC) chairman, after the deal was announced “are that it avoids the immediately harmful economic effects of trade retaliation and it puts the serious discussion concerning changes in the U.S. cotton program before Congress in the 2012 farm bill, which is where that discussion belongs.”
Peterson agreed and said the cotton program “will probably have to be addressed in the next farm bill. I give the Obama administration and the USDA credit for doing a good job and dealing with this in the interim.
“The cotton people know we have to deal with this. We’ve discussed this specific issue and whether the cotton program is (properly) structured going forward. They’re in the process of looking at their program, as well.”
It isn’t just cotton, said Peterson. Other commodity groups will spend this year “digging into how we’ve been doing things, looking at what the future holds, trade issues and so forth. They’ll come back with ideas of how we should move forward.”
In making the deal with Brazil, “we averted a situation that would have been messy if there had been (Brazilian) retaliation against other (U.S.) products. I think the cotton (industry) understands that. They realize we must find some way to deal with this.
“I don’t think this is necessarily tied to other crops. … In the past, we tried to have a one-size-fits-all but that may not be the case in the future. … We’ve bought some time until the farm bill. But if we don’t address it we may be back in the soup with potential retaliation issues and other problems.
“From what I can tell, we won’t be able to just ignore it. Does Congress have the political will (to make changes)? Who knows?”
Any idea how to change the cotton program?
“The cotton people are meeting and discussing this. We don’t grow cotton in Minnesota and I’m not an expert.”
Cotton representatives “are happy with the resolution negotiated recently that gives us breathing room. But they know we have to come up with answers. They’re having discussions and we’ll be involved in those when the time is right.”
Asked about legislation that would extend the biodiesel tax credit, Peterson said he is unable to “read the tea leaves” on the situation as “it’s mixed up with a bunch of other issues in the Ways and Means Committee. It’s always problematic to find the pay-fors and that’s why we haven’t done a longer-term extension. They’re having a hard enough time just finding enough (money) to extend it one year.”
Is Peterson confident it will be extended for another year?
“I think so. There’s support for doing that, at a minimum. A number of us will try to make it a longer-term extension. There are a number of things expiring. There’s more than just this in the mix.”
Peterson said the EPA’s E-15 blend decision “might come in August. I think it will be a positive decision. … From what I’m hearing, we’ll get some kind of labeling requirements (directed towards) older automobiles, small engines and things like that.”
Tackling tough issues
Asked if he foresees a restructuring of direct payments, Peterson was reminded he recently told rice growers to consider a price protection program versus the cost of production.
“I think we should look at it and that’s as far as I’m willing to go. … Rice had a big problem in the last year and they don’t have a crop insurance program that really fits their needs. I’ve been encouraging them to look at putting together a crop insurance that would work for rice. That would probably be significantly different from other crops. But I think it could be developed.
“Those are the kinds of things I want people to look at … to have as adequate of a safety net as we can have without having to do ad hoc disaster programs and other fixes. I’d rather regularize things through the farm program as much as we can.”
The SURE program, admitted Peterson, wasn’t embraced as enthusiastically as he’d hoped. “Part of that is because it was late in getting out, was complicated, was a new program and people were unsure about it. But I think it has potential if it’s tweaked some…
“We must look at all this together – the direct payments, the revenue system, the crop insurance system, the SURE program – and (find out) if this is the right way to put this together. Is there a more efficient way? A more productive way in terms of providing a safety net?
“If we move in the direction of the revenue program, I think we have to make it a county-by-county program instead of a state program. It would have to be set up so it’s assigned to the bank and you can borrow money against it.”
What about getting rid of the current loan program?
“I’ve told people we should put everything on the table – nothing more than that. I’m not advocating for something.
“The problem with the loan rates is they’re so low they’re not really effective. We don’t have the money to raise them enough to make them work. That fact in itself requires we examine it.
“That’s why dairy is looking at their program. Their price support is so low it isn’t an effective safety net anymore but is causing them trouble in the export/import market. We’re becoming the balancing point for the world because of it. So they’re taking a look at how their program is structured.
“My goal is to do the best job with the money we have to provide a safety net for production farmers.”
Peterson has also been quoted recently on the need to consider consequences of direct payment funds based on land ownership. “We aren’t pushing any one thing. Something that needs to looked at and addressed is: are the direct payments being capitalized in land values and rents? Is that making it more difficult for young farmers to get started? That’s part of the debate.
“My interest is in providing a safety net for the average production farmer out there. That’s where I think we have a role. Those guys don’t have the deep pockets and don’t have $500,000 to put a crop in. They rely on banks and the banks rely on … being paid if the crop is wiped out for some reason.
“How do we put that together so it works for the farmer, the banker and continue to be the country that not only feeds itself but much of the world?”