Lawmakers challenge USDA officials on farm bill implementation

By Sarah Gonzalez

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WASHINGTON, March 26, 2015- Lawmakers expressed general satisfaction with USDA's implementation of the 2014 Farm Bill, but also asked pointed questions regarding their concerns about commodity programs and crop insurance during a House Agriculture subcommittee hearing Thursday.

The deadline for farmers to choose between commodity price and revenue support programs offered through the 2014 farm bill ends next week and almost 80 percent have already filled out the necessary forms.

But as of last week, there are another 20 percent or so that have yet to make up their mind, USDA Farm Service Agency (FSA) Administrator Val Dolcini testified at the hearing.

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Under the farm bill, producers must choose one of two new commodity programs - Price Loss Coverage (PLC) or Agricultural Risk Coverage (ARC) - for each crop on each farm by March 31. This decision will last the life of the farm bill, or about the next five years. About 77 percent of producers who need to so have already made this decision, Dolcini said.

Failure to select between PLC and ARC means that producers will forfeit payments for 2014 and be automatically enrolled in PLC for the 2015 through 2018 crop years.

Producers must also decide to reallocate their base acres and update their yield figures by that same date, a deadline that USDA extended from Feb. 27. Dolcini said as of March 19, about 94 percent of farms likely to enroll in ARC or PLC have made their base reallocation and yield updating decisions.

Farmers who come into FSA offices before the March 31 deadline and set up an appointment - even if that appointment is after the official deadline - will be considered as registered.

Subcommittee Chairman Rick Crawford, R-Ark., said although the 2014 farm bill was drafted during a period of record-high prices, producers are now experiencing a 43 percent drop in net farm income. 

“Current conditions are going to test the farm bill and its ability to mitigate and respond to growing financial stress in farm country,” he said. 

 
Subcommittee Chairman Rick Crawford, R-Ark., and 
Ranking Member Tim Walz, D-Minn (Credit: House
Agriculture Committee) 

 

He praised USDA for a timely farm bill rollout, but criticized the agency's definition, announced last week, of an “actively engaged” farmer that is eligible to receive up to $125,000 in farm payments, a task Congress assigned to Agriculture Secretary Tom Vilsack in the farm bill.

Crawford said USDA's definition is too narrow. “Limiting the number of managers on a farm to one, two, or a maximum of three managers is truly arbitrary and capricious and ignores the remarkable diversity and complexity in agriculture today,” he said.

The full committee chairman, Rep. Mike Conaway, R-Texas, mentioned a problem many farmers are having with cover crop usage and base reallocation. Producers are finding that if they planted a covered commodity like corn in the spring after they planted a fall cover crop, which is a noncovered commodity, FSA is not recognizing the corn acres as eligible for base reallocation.

“The farm bill gave you discretion here and I would hope that you would use that discretion to make this happen,” Conaway said. “It is the right thing to do.”

Regarding new crop insurance programs, Risk Management Agency Administrator Brandon Willis noted that the Supplemental Coverage Option (SCO) is available for the 2015 crop year for corn, cotton, cottonseed, grain sorghum, rice, soybeans, spring barley, spring wheat and winter wheat. Willis said RMA is working to expand this coverage in the 2016 crop year to potentially 40 additional crops, including peanuts.

He also said peanut farmers now have the ability to manage risk for both yield and revenue losses through the new Peanut Revenue Policy.

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Rep. Doug LaMalfa, R-Calif., expressed his concerns that rice is listed as a “thinly traded commodity” for the 2015 crop year, so it is not eligible for revenue protection. “2015 will be a volatile price market; we need a revenue policy for rice,” LaMalfa said.

Willis confirmed that rice growers can only get yield protection for the 2015 crop year, but the agency would work with Congress on a solution for future years.

Willis touted RMA's delivery of Adjusted Production History (APH) yield exclusion “ahead of schedule,” but Lucas noted that wheat growers in his region were not able to receive their APH adjustments, which lets them remove a bad drought year from their production history.

“I'd note that some of my wheat growers were very sensitive about being left out last fall,” Lucas said. Willis confirmed that the yield exclusion for the next crop year would be in place in time for wheat growers this fall.

Rep. Randy Neugebauer, R-Texas, questioned Willis about enterprise units, and his intent in the farm bill that producers could choose by practice, so that irrigated and dryland cotton could be categorized separately.

“[Our intent was] to give producers as many choices as we can,” he said.

An interim rule has been issued on that provision, and Willis said RMA could look into this issue for future crop years.

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