With the new farm bill likely stalled until after the November mid-term elections, one of the biggest disputes still to be ironed out is a provision in the House farm bill that would end commodity program payments for acreage on which farmers haven’t been growing program crops.
The provision, which was key to holding down the cost of the House-passed farm bill’s commodity title, has faced resistance from some farm groups, including in Kansas, home state of Senate Agriculture Chairman Pat Roberts and one of the states expected to be most affected by the provision.
Critics say the provision would remove one of the last vestiges of planting flexibility enacted by the 1996 Freedom to Farm law while also discouraging farmers from planting soil-conserving crops.
Under the provision, a farmer's base acres that were not planted to a program crop from 2009 through 2017 would no longer be eligible for payments under the Price Loss Coverage or Agricultural Risk Coverage programs.
The provision could affect millions of acres nationwide, including more than a million in Texas along with large amounts in Oklahoma and Kansas, sources say. In many cases, the base acreage has been planted to grass instead of a program crop such as wheat, soybeans or corn.
Removing the flexibility to plant non-program crops would reduce federal commodity payments by $900 million over 10 years, sources say, which would help pay for another provision in the House bill that would allow producers participating in PLC to update their program yields if they experienced at least 20 consecutive weeks of severe drought during 2008 through 2012. Many of those producers are in the same states that would be most affected by the provision on unplanted base acres.
Roberts, a Republican, said he is waiting for a USDA analysis of the impact a possible compromise would have on affected farmers.
“We have to have those answers that we’re asking of the department and, for that matter, I don’t think it’s fair to go ahead with this without letting farm organizations weigh in,” Roberts said.
He also suggested that a compromise should provide some compensation for the payments farmers would lose. “Where do we go to at least make that person whole? He’s really practicing good conservation practices, and the land should be used for that purpose … They shouldn’t be penalized,” Roberts said.
Roberts said that allowing farmers to get payments on those base acres was an important part of the 1996 Freedom to Farm bill that dismantled production controls that dated back to the 1930s. “Freedom to Farm also is freedom not to farm,” he said. Roberts was the bill’s chief author as chairman of the House Agriculture Committee that year.
House Agriculture Chairman Mike Conaway acknowledged in an interview that he and Roberts were at odds over the provision but that ending the payments was needed to fund the bill's commodity title.
“We’ve got to find the money some place," Conaway said. "If land has been in grass for 10 years we need to have a conversation about whether or not” it should continue getting payments, he said.
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The four lead negotiators, Roberts, Conaway and the ranking Democrats on their committees, were scheduled to meet Wednesday to continue their talks but won't have a deal ready before the 2014 farm bill expires on Sunday. And, with the House expected to be out of session in October, Roberts said it will be difficult to enact a new bill until after the Nov. 6 congressional elections.
The dispute over the commodity title bears some marks of a previous fight between the House members and senators over what became the 2014 farm bill. The dispute that time was whether PLC payments should be linked to historical plantings, or base acres, or actual plantings. The bill wound up linking them to base acres.
One of the concerns expressed by opponents of tying payments to planted acres was that it could have made it easier for competing countries to claim that the U.S. farm bill was unfairly distorting trade under World Trade Organization rules.
Joe Glauber, a former chief economist for USDA who is now with the International Food Policy Research Institute, said he doubted that ending payments for unplanted base acres would make it any harder to defend U.S. commodity programs at the WTO. ARC and PLC are classified as “non-product specific” support because payments aren’t tied to a particular commodity. A producer with corn base doesn't have to plant corn to get a payment, and that wouldn’t change under the House provision, he said.
But in the future, farmers may be less likely to “put land in conserving uses for a year (say, in reaction to low prices) because they would fear losing those base acres,” Glauber said in an email.
Ryan Flickner, senior director of public policy for the Kansas Farm Bureau, said that many farmers have diversified their operations by not planting program crops on some of their base acreage.
“I’ve heard multiple real life situations where a producer is planting rye or sudan grass, or feed sorghum for grazing or haying purposes to feed their livestock on land that has base acres,” he said. “These are not covered commodities, but given the soil type, topography, and grain/livestock operation structure it does make financial and profitability sense in many cases.”
Ferd Hoefner, senior strategic adviser for the National Sustainable Agriculture Coalition, said his group opposes removing the broader planting flexibility on base acres.
“Agriculture badly needs greater diversity, both for environmental reasons and ultimately for reasons of risk management and improved farm income,” he said.
“Telling farmers who took marginal or steeply sloping land and returned it to grass-based agriculture that they are now as a consequence out of the program, while neighbors who perhaps made the opposite choice and have witnessed higher erosion and runoff in the meantime can continue with payments, would be grossly unfair.”
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