Farm bill proposal looks to save $23 billion in spending

The American Farm Bureau Federation recently released its proposal for the stalled Farm Bill. The plan, which looks to save $23 billion in farm program spending, would create a new safety net for U.S. farmers. Under the new proposal, producers would be able to choose between a Stacked Income Protection Plan (STAX) program and an updated target price program.

All program crop producers would have marketing loan programs and crop insurance available to them as well.

STAX would allow farmers to add-on yield or revenue coverage to the crop insurance coverage they already have in place. This program would only be offered as a buy-up policy with a 10-25 percent deductible and would be subsidized at 70 percent.

This new program would be available to producers of grain, oilseeds, cotton, apples, potatoes, tomatoes, grapes and sweet corn. The target price program would be based on the marketing-year average price from the past five years (2007-2011) and those projected by the CBO for the next five years (2012-2016). The actual target price would then be set by taking the average price for those 10 years and reducing them by 25 percent for corn and soybeans, 15 percent for wheat and 10 percent for rice and peanuts. The target price program would still likely appeal more to rice and peanut producers.

Steve Nelson, president of the Nebraska Farm Bureau, says “It is very good that talks have resumed pertaining to the Farm Bill. It creates much uncertainty when there isn’t a Farm Bill. It is good that talks have begun again in the House and Senate.”

Nelson added, “First of all, it is fairly wide open where it goes. Senators who passed it last year have to do it again since nothing happened. I’d like to see them pass something similar to what they did last year.”

Nelson said that there is less funding and dollars this year than last. The House agriculture commission proposed a bill that never made it to the floor.

He added that in normal circumstances, the differences had been worked out in past and that the House last year wanted to cut more than what the Senate proposed to do. This was reason why the House didn’t event move bill.

Nelson also said that the measure should offer strong support for crop insurance; it provides a safety net when production is hurt or prices go too low depending on time of year.

“Crop insurance is very, very important. There should be options for different crops because of the difference in the marketplace. One option is to provide for ability to buy up crop insurance or include coverage. They provide different levels of coverage for a number of crops that aren’t grown in Nebraska. They should have a program that provides different options for different circumstances and different crops. A combination of programs,” Nelson said.

He added that they should also provide livestock producers help in draught areas.

Nelson said that people often ask more today than ever “why do we have a Farm Bill and why do we need one?”

His answer to that is, “It is really a food security issue. National security is important. People usually think of soldiers when it comes to national security. But having an abundance of adequate food supply is part of national security. It is to maintain production when times become extreme-- natural or otherwise. It is important to have the ability to produce food, fiber and fuel that we need in this country.”