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February 2012

Taking a New Approach with the Farm Bill


Bob Stallman
President
American Farm Bureau
By Bob Stallman
President, American Farm Bureau

‘Farm Bill.’ It’s probably the most synonymous term associated with American agriculture. It plays a huge and significant role in farming operations across the nation, and shapes everything from the ebbs and flows of how farmers go about their daily business to their conservation efforts and even disaster relief. Understandably, formulating a new farm bill every five years is no easy task.

The farm bill that Congress is working on now will certainly look different than any previous legislation. Times have changed. The U.S. economy, consumers’ attitudes on food production and even farmers’ opinions on how best to run their businesses are all different from the last go-round. So, as we head into creating the new legislation, it’s important that Farm Bureau lead the discussion – and we need to hit the ground running.

The Bigger Picture

Earlier this year, after much thought and deliberation, the American Farm Bureau developed a plan to establish a catastrophic revenue loss program. This plan is unique in that it will help protect America’s farmers from losses that truly endanger the very core of their farms. At the same time, it recognizes today’s budget realities. It is also unique in that it can be applied to a broader range of commodities, like fruits and vegetables.

There have been several recent proposals for program crops with payments that kick in after only a small decrease in farm revenue for some crops and set up higher target prices for others. But, as Farm Bureau sees it, the government should take on the very serious, large-scale risks that happen infrequently instead of smaller risks. Agricultural programs are intended to help farmers deal with big challenges they cannot handle alone, not minimal losses.

We have serious concerns about the other proposals floating around, which dictate different rules, different crops and different payments. Not only would such programs be a nightmare for local Farm Service Agency offices to administer, but farmers would have the ability to cherry-pick which program works best for them. Because of distortions in price, we’d have a system of farmers deciding what to produce based on government payments rather than market signals.

A New Way of Thinking

In past farm programs, the government simply wrote checks to farmers to help them sustain America’s food supply. But, times are changing. While the majority of Americans think farmers need help, they don’t agree on just writing checks. We want to flip that around. Government should accept systemic risk, which would lower insurance premiums for farmers and allow them to choose their own coverage at a much lower cost. Our proposal is a new approach to farm policy.

Not only would the Farm Bureau’s plan get rid of direct and countercyclical payments, it would eliminate the need for ad hoc disaster assistance for crops, which, as we’ve experienced in the past, offers no assurance to farmers when catastrophe happens.

The Farm Bureau plan is the best possible solution for a new farm program. It’s scalable depending on what the final budget is and could be utilized for all commodities as long as they are covered by crop insurance. But, most importantly, it offers farmers peace of mind that when the going really gets tough, they will have someone watching their back.