In farm bill recommendations sent to Congress Sept. 29, the American Farm Bureau Federation said that continuing most current farm programs is the best way to ensure a farm safety net that works for all commodities and regions of the country.
The Farm Bureau recommendations include maintaining all current commodity programs, including direct payments, crop insurance, ACRE (Average Crop Revenue Election), target prices, and marketing loan programs.
Farm Bureau is willing to consider modifications and adjustments to these programs to make them more effective in a reduced budget environment.
AFBF acknowledged that funding reductions will have to be made and recommended spreading them out by making 30 percent of the necessary cuts in each of three program areas: commodity programs, conservation and nutrition, with 10 percent of the cuts in crop insurance funding.
Those four areas make up 99 percent of the funding authorized in the farm bill.
AFBF noted, however, its recommended cuts in nutrition program funding could be made through administrative rather than program benefit cuts.
AFBF recommended apportioning the commodity program cuts in a way that provides 94 percent of the reductions from reduced outlays for direct payments, 5 percent from the ACRE program and 1 percent from the dairy program.
Because the research and rural development titles already are small parts of the farm bill budget and high priorities for Farm Bureau, AFBF recommends that those programs be maintained at current funding levels.
Other programs in the 2008 farm bill should receive minor funding reductions to move toward a more balanced budget, AFBF said.
While the new farm bill normally would not be written until next year, this fall’s push for budget cuts means that major farm policy decisions will come sooner rather than later.
The Joint Committee on Deficit Reduction or “super committee” is charged with coming up with at least $1.2 trillion in budget cuts this fall.
About $10-$40 billion of the cuts are expected to come from farm bill programs, cuts that would be deep enough to result in a de facto rewriting of the farm bill this year.
Must act quickly
The House and Senate Agriculture committees will need to submit ideas to the super committee soon to ensure that those in Congress who best understand agriculture and rural America have a meaningful opportunity to weigh in on the process.
Recently the Obama administration proposed even deeper cuts than those already expected of the super committee, to help offset the cost of the president’s American Jobs Act plan.
The president’s proposal would include a $33 billion reduction in agriculture programs. Farm Bureau said it adamantly opposes reductions of that magnitude.
However, using the $33 billion figure as an example, the percentage cuts recommended by AFBF would break down as 15 percent from the $65 billion commodity programs baseline, 16 percent from the $63 billion conservation programs baseline, 1 percent from the $700 billion nutrition programs baseline and 4 percent from the $80 billion crop insurance baseline.
Direct payments have become a target because they are not based on crop production or prices.
However, AFBF said that if it were not for direct payments during droughts over the past few years, “many family-owned and operated farms would be out of business.”
One way to reduce the cost of direct payments, AFBF suggested, is to lower the percentage of the acreage base used to calculate the payments.
AFBF also endorsed new dairy program legislation (H.R. 3062) offered by Rep. Collin Peterson (D-Minn.), House Agriculture Committee ranking member. The Peterson proposal would eliminate the current dairy price support program and Milk Income Loss Contract payments and replace them with a voluntary gross margin revenue insurance program.
Additional savings could come from consolidating conservation programs, according to AFBF, into a working lands program, a retirement lands program and the Conservation Reserve Program (CRP), as well as reducing the number of acres eligible for CRP.
“We believe 23 conservation programs are too many,” Farm Bureau said.
Farm Bureau recommended that two-thirds of the cuts in conservation programs come from the retirement lands program, with the remaining third coming from the working lands program.
The National Corn Growers Association farm bill proposal can be found at http://southeastfarmpress.com/grains/corn-growers-introduce-adap-proposal-2012-farm-bill.
The National Cotton Council approach can be found at http://southeastfarmpress.com/grains/corn-growers-introduce-adap-proposal-2012-farm-bill.
The American Soybean Association has also submitted a proposal. It can be found at http://southeastfarmpress.com/soybeans/soybean-growers-announce-farm-bill-proposal.