Debate over the future of U.S. farm programs shifts to Senate

by Jay Sjerven
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WASHINGTON — Advocates for significant reform of U.S. farm policies, frustrated with battles lost during the debate leading to the passage by the House of Representatives of the Farm, Nutrition and Bioenergy Act of 2007, turned their attention to the Senate.

The Senate Committee on Agriculture, Nutrition and Forestry was expected to mark up its version of the 2007 farm bill following the August recess. The current farm act, the Farm Security and Rural Investment Act of 2002, expires Sept. 30. While current farm policies have stalwart defenders on the Senate agriculture committee, both Democrats and Republicans, a powerful reformer, Senator Richard G. Lugar of Indiana, also is a longstanding member and former chairman of the panel.

In the House, the most ambitious effort at reform was proposed by a bipartisan group of representatives from outside the agriculture committee. But in the Senate, two members of the agriculture committee, Senator Lugar and Senator Sherrod Brown of Ohio, have proposed separate reforms of farm programs.

The chairman of the Senate agriculture committee, Senator Tom Harkin of Iowa, champions increased investments in conservation, especially on working lands, and in bioenergy. Mr. Harkin was chairman of the Senate agriculture committee when the current farm law was crafted, and he was a principal author of that legislation. At the same time, he was said to be more open to reform of commodity support programs than was his counterpart on the House agriculture committee, Representative Collin Peterson of Minnesota.

"There are a lot of good features in the House bill and, of course, there are others I believe the Senate will improve upon," Senator Harkin said. "Most notably, the House bill did serious damage to conservation, and in doing so, ignored its tremendous value and potential and its strong support from agricultural producers and conservationists."

Addressing the Agribusiness Club in Washington on July 25, Mr. Harkin said, "We have the responsibility to write a farm bill that looks to the future, not in the rearview mirror."

With regard to the commodity title that outlines the structure of farm programs, Mr. Harkin observed, "We need to be rigorous about using our budget resources as effectively and efficiently as possible. That is why I have long favored a smarter, fairer countercyclical system that places a stronger focus on paying farmers when their incomes fall and they really need the help." The statement was interpreted as support for a revenue-based countercyclical system as opposed to the current price-based program.

Mr. Harkin said the new farm bill must be in compliance with U.S. commitments and promises under international agreements.

"Of course we need to defend our programs, but we also must recognize reality, solve the problems in our programs and move on," he said. "It is far more important to prepare for the future so American agriculture can succeed in this century than it is to fight losing cases before the World Trade Organization."

Mr. Harkin said with the boom in biofuels production pulling more fragile or marginal acreage into production, the farm bill’s conservation title will be especially important. He noted the 2002 act gave a higher priority to supporting conservation measures on working land.

"Yet, since the 2002 farm bill was passed, many billions of dollars have been taken away from money we dedicated in that bill to conservation," he said. "Well more than $4 billion has been cannibalized from the Conservation Security Program alone for disaster and budget reconciliation. That was shortsighted and destructive and we need to chart a far different course in the new farm bill."

Mr. Harkin said he’d like to see at least $4 billion invested in farm-based energy over the next five years.

"The prime goal of the farm bill in energy is to provide the framework to unleash the potential of agriculture and rural communities to supply energy to our nation," he said.

Mr. Harkin also indicated it was time to improve the nation’s nutrition programs.

"Millions of families across our nation are trying to feed their children, their elderly or those with disabilities with benefits based on formulas that in some respects have not been updated since the 1970s," he said.

Lugar criticizes House efforts

Mr. Lugar was unsparing in his criticism of the House farm bill.

"The farm bill passed by the House is a severe blow to taxpayers, most farmers, rural communities, the environment and U.S. prospects to export products," Mr. Lugar said. "The House bill fails to reform an expensive and broken farm subsidy system. It will send more money to a few select farmers, while continuing to ignore the vast majority of American farmers. The president is justified in stating he would veto this legislation."

Mr. Lugar said he was hopeful a coalition of senators would advance legislation that would allow all farmers to assure up to 85% of their net farm income through a government-backed whole-farm insurance program. In addition, all farmers would have I.R.A.-type savings accounts to cover the balance of any losses. These programs would replace the current commodity price support system based on the non-recourse marketing loan program, direct payments and price-based countercyclical payments.

Mr. Lugar’s proposals are contained in the Food and Agriculture Risk Management for the 21st Century, or Farm-21, he introduced earlier this year (see Food Business News of July 24, Page 35). A companion bill by the same name was introduced in the House by Representative Ron Kind of Wisconsin and Representative Kevin Flake of Arizona but was rebuffed by the House agriculture committee.

Mr. Lugar said his reforms would allow for increased funding for rural development, research, nutrition programs and bioenergy initiatives even while saving taxpayers billions of dollars.

Yet another approach to substitute a revenue-based countercyclical program for the current price-based system was proposed by Mr. Brown, a freshman both on the agriculture committee and in the Senate, and by veteran legislator Senator Dick Durbin of Illinois. Mr. Durbin is not a member of the agriculture committee but has been outspoken on issues relating to food safety and international food assistance. He’s the third-ranking Democrat in the Senate.

Mr. Brown and Mr. Durbin’s Farm Safety Net Improvement Act of 2007, S.1872, proposed a two-tier revenue insurance program. Farmers would rely on private revenue insurance at the individual level, while the government would handle widespread losses at the state level. The federal government would provide a payment to a producer when the farmer’s actual revenue per acre falls below 90% of the forecast revenue per acre for a specific crop in his or her state. Private insurance would cover a farmer’s individual revenue losses beyond what the government covers.

The Durbin-Brown plan would replace existing price-based countercyclical payments and loan deficiency payments. Direct payments would not be affected.

This article can also be found in the digital edition of Food Business News, August 7, 2007, starting on Page 32. Click here to search that archive.

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