NFU adds support for new PLC commodity provisions
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WASHINGTON, June 18, 2013 - The National Farmers Union (NFU) weighed into the debate over whether or note lawmakers should support Price Loss Coverage (PLC) provisions in the committee's version of the 2013 Farm Bill, arguing that the provisions should not be amended as corn, soybean and canola organizations have requested.
NFU President Roger Johnson sent a letter today to U.S. House of Representatives Committee on Agriculture Chairman Frank Lucas and Ranking Member Collin Peterson, praising the existing legislation.
“The Price Loss Coverage (PLC) option in particular is under repeated and unwarranted attack from members of Congress, the administration, and some outside interests who seem to have forgotten the conditions of the late 1990s after the failure of ‘Freedom to Farm' policies that eliminated farm safety net protection against extremely low market prices,” noted Johnson
NFU argues that modifying PLC to establish a reference price based on a five-year Olympic average price, as some have suggested, would weaken the safety net as multiple years of lower prices would decrease the support prices to very low levels.
“PLC in its current form sets fixed reference prices well below the cost of production so as to provide some help in very tough times but not guarantee profits,” said Johnson. “For example, PLC as proposed sets a corn reference price of $3.70/bushel, while the 2012 average total cost of production for corn was $5.41/bushel. For soybeans, the reference price would be set at $8.40/bushel, but the 2012 average total cost of production was $10.03/bushel. For wheat, the reference price would be $5.50/bushel, while wheat's 2012 average total cost of production was $6.77/bushel. In addition, the level of support set by PLC would not distort planting decisions since the program only triggers during market collapse.”
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