Familiar themes surface at first farm bill field hearing



Familiar themes surface at first farm bill field hearing

© Copyright Agri-Pulse Communications, Inc.

By Agri-Pulse Staff

Des Moines, IA, April 30- The first field hearing on the 2012 Farm Bill took place at the Iowa State Fairgrounds on Friday with several producers suggesting ways to increase profits for farmers through a stronger federal safety net. But how that safety net should be designed, either through a new program or improvements in existing programs, is still a moving target.


Six members from the U.S. House Agriculture Committee participated in the hearing, along with Congressman Tom Latham, representing the U.S. House Agriculture Appropriations Subcommittee. Representing the House Agriculture Committee were Chairman Peterson (D-MN), Ranking Minority Member Lucas (R-OK), Representative Boswell (D-IA), Representative King (R-IA), Representative Herseth Sandlin (D-SD), and Representative Costa (D-CA).

 Experience a renewed commitment to crop insurance.


House Agriculture Committee Chairman Collin Peterson (D-MN) once again made it clear that he wants to seek ways to improve use of existing funds rather than seek new sources of funding.


“We are not going to have any extra money for this farm bill. We will be lucky to hang on to what we've got,” Peterson emphasized. “I saw in some of the testimony, people want to raise loan rates because they are ridiculously low. If we get down to loan rates we are out of business. It ain't going to happen. The money it costs to raise loan rates, it's not realistic.


"If there are ways that we can use the money we have to create a better farm safety net, I want to look at those options," Peterson said.


Frank Lucas, the committee's ranking minority member, shared his concerns about writing a bill that benefits production agriculture and reminded the audience that 75% of the current farm bill goes toward nutrition programs. The Oklahoma Republican also said he wants to avoid costly environmental regulations that make it more costly and difficult to produce crops and livestock.


Lucas said he also hopes to help producers avoid what he sees as negative effects of environmental regulations that hinder their ability to market crops.


Dairy policy: Brooklyn dairy farmer Dane Lang said the days of milk being produced for $9.00 or 10.00/cwt are over and not coming back. A recent drop in grain prices has helped stabilize the cost of producing milk to somewhere between $15-17.00 per cwt.


“Dairy farms are still losing money and Iowans are still losing dairies,” he added.

Lang said that quality improvements would automatically disqualify some cows from dairy production. He said that would help farmers decrease supplies and drive up prices, which have only begun to rebound from near record lows last year.


ACRE program. There was general agreement that the new Average Crop Revenue Election (ACRE) program is too complicated. Ottumwa, IA. farmer Richard Bayliss outlined several problems with the new program, including the difficulty of trying to get elderly landlords to understand it. Chairman Peterson suggested the program could be retooled.


Crop insurance: There was general agreement that crop insurance has been working and a few concerns about how potential cuts or structural changes will impact producers going forward.


“We have to do what's right for the taxpayers as well as what's right for the agricultural industry,” emphasized Anita, IA. producer Varel Bailey. “Crop insurance subsidies now provide an incentive to move crop production into marginal areas. That is a dilemma…. with that incentive, you increase the potential for disaster problems, as well.”

Bailey suggested that we pull some money out of crop insurance and use those funds to make the ACRE program more workable.


Renewable energy: Jeff Stroburg, Chairman and CEO of Renewable Energy Group, the largest biodiesel producer in North America, expressed concerns that banks are simply not willing to partner with commercial ready bioenergy projects.


He suggested several program changes, including allowing USDA loan guarantee programs to provide for loans and grants together. Now you can do one, but not the other.


 “We recommend allowing both guarantees and grants at 80%. Having both reduces the lender's exposure and would encourage lenders to partner with projects more easily.


Stroburg also called for creation of a counter-cyclical program directed to biodiesel producers to manage risk during times of high commodity prices. For USDA's 9005 program, he said the capacity limit of 150 million gallons should be removed.


“This limitation has a chilling impact on future growth. Congress should not decide how big a biodiesel producer should be,” added Stroburg.


Additional hearings are scheduled in Nampa, Idaho; Fresno, Calif.; Cheyenne, Wyo.; Morrow, Ga.; Troy, Ala.; Lubbock, Texas; and Sioux Falls, S.D.


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