WASHINGTON, March 14, 2012 -A Senate Agriculture Committee farm bill hearing on risk management and commodities scheduled for Wednesday was pushed back to Thursday due to a busy Senate floor schedule. But the one-day delay is not expected to interfere with Chair Debbie Stabenow’s timeline for beginning a mark up prior to the Easter recess that starts on April 2.

A half-dozen commodity groups that will present testimony at the hearing huddled Tuesday to compare notes. Witnesses representing corn, cotton, peanut, rice, soybean and wheat growers, along with American Farm Bureau Federation President Bob Stallman and National Farmers Union President Roger Johnson, are expected to advocate for a set of common farm policy principles but won’t agree on specific safety net programs.

In the absence of consensus on how a new farm safety net should be structured and without the Ag Committees knowing how much money they’ll be required to cut from farm programs, Stallman expressed pessimism Tuesday about the prospects for approving a farm bill in an election year. In remarks to reporters, the AFBF leader complained that all ag organizations “have a different plan and we’re not together on what that plan should be. … Right now, individual commodity organizations are not accepting the fact that everyone is not going to get their wishes fulfilled.”

According to a copy of his testimony obtained by Agri-Pulse, Stallman will tell the Senate farm panel that, while the nation’s largest farm group continues to believe its catastrophic, deep loss revenue protection proposal is the best farm policy approach, it is willing to evaluate middle-ground alternatives in order to “play a positive role” in the farm bill debate.

One alternative AFBF is willing to discuss is a supplemental “group or area insurance” program that would allow but not mandate a producer to purchase a county-based yield or revenue policy on top of their individual crop insurance policy. See diagram above.

The concept, championed by Rep. Randy Neugebauer, R-Texas, as a Total Coverage Option (TCO) and first floated during debate on the 2008 Farm Bill, is garnering a lot attention from ag groups, a Hill aide said. It may be renamed the Supplemental Coverage Option (SCO).

Under the program, a 10% loss at the county or crop reporting district level would trigger a supplemental indemnity to participants. 

“Importantly, this program insures against area-wide losses rather than individual losses,” Stallman will testify. “This approach alleviates broad risk without undercutting an individual producer’s skill to competitively manage farm level risk.”

But determining whether a shallow loss type of program should be triggered at the farm level or based on a larger geographic area like a county or crop reporting district could be troubling for members of the Senate Agriculture Committee who are trying to reach consensus on the commodity title. A farm level trigger is important to Senator Kent Conrad, D-N.D., and Max Baucus, D-Mont. and other members, noted Jim Miller, Conrad’s top agricultural aide, because it would help ensure that farmers get help when they actually suffer a loss---a potential problem in large counties or crop reporting districts. But critics charge that farm level triggers could potentially lead to payments being made almost every year. “If that’s the case, you might as well just keep direct payments,” noted one Senate source.

Speaking at the American Soybean Association board meeting in Washington, D.C. on Tuesday, Miller said another major challenge for members of the Senate Agriculture Committee will be addressing the needs of Southern crop producers who have “been much more reliant on direct payments. We need to find some way to address their concerns,” whether it is through improvements in crop insurance or new programs, Miller noted. “But at the end of the day, no one is going to get everything they want.”


Original story printed in March 14, 2012 Agri-Pulse Newsletter.

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