Senators Seek to Save Counter-Cyclical Program


by Chris Clayton, DTN Ag Policy Editor

WASHINGTON (DTN) — The counter-cyclical payment program would not be eliminated, but extended under an amendment filed Thursday by several senators in an effort to ease complaints of commodity inequities in the farm bill.

The amendment would extend the program through 2017 for every commodity other than upland cotton. It also would raise target prices slightly under the counter-cyclical program, but lower the base-acre calculation used for payments.

Under the amendment, target prices would be raised for major commodities as well. Wheat’s target price would rise from $4.17 a bushel to $4.46; soybeans would go from $6 a bushel to $6.30; corn, sorghum and feed barley would go from $2.63 a bushel to $2.81; malt barley would go from $2.63 a bushel to $3.57; and rice would go from $10.50 per hundredweight (cwt) to $11.

Rather than eliminate base acres, a new payment formula using base acres would be created. A producer could only receive counter-cyclical payments on 75{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of planted or prevented acres, “not to exceed 75{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of base acres for the covered commodity established for the 2012 crop year.”

Effectively, that translates into producers being eligible to receive counter-cyclical payments on potentially slightly more than 56{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of their base acres.

The Senate adjourned for the week on Thursday evening, having taken only a couple of votes on amendments, largely due to the lack of agreement on which amendments should get a floor debate. The volume of farm-bill amendments has reached more than 270 total, but the bill remained largely locked up because of demands by Republican leaders to attach some regulatory relief measures involving mainly EPA but also the Corps of Engineers and other agencies. While some of the regulations may specifically affect farmers, Democratic leaders have argued those amendments are not germane to specific provisions of the farm bill.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., in a brief interview after a floor speech, called the amendment “an important contribution” that will have to be studied.

“I haven’t analyzed it closely. We are certainly looking at the scores on that. It’s certainly something we will evaluate both in the context of the Senate floor as well as conference.”

Stabenow said leaders were close to putting together a consent agreement on amendments. Speaking on the floor, Stabenow said the number of amendments was being whittled down, and she looked forward to presenting a full package to the Senate.

On the counter-cyclical program, there was a plan to modify the program last fall when the House and Senate Agriculture Committees wrote a budget-cutting farm bill for the failed Supercommittee talks. In an effort to reduce the growth of USDA program spending by $23 billion, the counter-cyclical program and direct payment programs were dropped in the Senate version of the farm bill this spring.

Some commodity groups that have more growers in the Midwest have opposed new efforts to establish higher target prices in the new farm bill by saying target prices distort planting decisions by farmers.

On commodities, Southern senators have complained that peanut and rice producers were being shorted under the Agricultural Risk Coverage program created in the Senate farm bill being debated on the Senate floor. That inequity has been one of the reasons stalling out the ability to move ahead with a full debate on amendments.

ARC pays up to $50,000 for an individual, or $100,000 for a married couple, based on a shallow farm loss that would not be covered by crop insurance. Rice producers in particular have complained that the program doesn’t help them because rice isn’t as susceptible to yield losses as other crops.

The amendment, #2425, was offered by Sen. Kent Conrad, D-N.D., as well as Sen. Saxby Chambliss, R-Ga.; Sen. Max Baucus, D-Mont.; and Sen. John Hoeven, R-N.D. Notably, no senators from major rice states signed on to the amendment.

Chambliss, who has been critical of the farm bill since it passed the committee in late April, said the counter-cyclical amendment reflects that others aren’t happy with the single ARC program.

“This is still a work in progress as we seek a responsible bi-partisan, multi-regional approach to providing an adequate safety net for farmers and the fact that the senators from the upper Plains are involved is a clear indication that other regions aren’t enamored with ARC,” Chambliss said.

Peanut producers would see a higher price compared to the farm bill that passed out of the Agriculture Committee. Rather than a $495-a-ton reference price, it would be $25.25 per hundredweight, or effectively $505 a ton. Yet, peanut producers would face the same 56{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} acreage formula.

The amendment also returns the $65,000 counter-cyclical payment cap in the current farm bill.


© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.

Posted with DTN Permission by Haylie Shipp


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