WASHINGTON, April 23 – In a letter sent today, American Farm Bureau Federation (AFBF) President Bob Stallman outlined what his organization supports and what the group hopes to see changed in the draft farm bill legislation released by Senate Agriculture Chairwoman Debbie Stabenow, D-Mich and Ranking Member Pat Roberts, R-Kansas, on Friday. In addition, they touted new risk management benefits associated with their own systemic risk reduction proposal.
Overall, we place a high priority on your decisions to:
Stand firm on utilizing the figure of $23 billion in savings suggested to the Joint Committee on Deficit Reduction last fall as the committee’s reductions target for this bill;
Protect and strengthen the federal crop insurance program and not reduce its funding;
Develop a commodity title that attempts to encourage producers to follow market signals rather than making planting decisions in anticipation of government payments; and
Refrain from basing any program on cost of production.
However, the group noted several areas of the draft bill that need improvement, including:
Improving the equity across all commodities. The variety of program options continues to raise concerns that some programs will cause planting decisions based on farm program benefits that accrue more beneficially to a particular crop;
Addressing the net effect of the “Agriculture Risk Coverage (ARC) Eligible Acres” provisions to ensure a true “planted acres” approach and avoid recreating “base acres” issues that raise equity and planting distortion concerns. While we support the requirements in the Committee Print to eliminate “double dipping” between either ARC or Stacked Income Protection Plan (STAX) with crop insurance, we still have concerns about an 89 or 90 percent coverage level being so high at the farm level as to include fraud or abuse, as well as the fact that the federal government should not be covering losses that could be managed through the normal course of business; and
Re-instituting current payment limitations and the Adjusted Gross Income provisions in current law.
“Fundamentally, Farm Bureau continues to support a single program option for the commodity title that extends to all crops,” Stallman wrote. “We believe the safety net net should be comprised of a strong crop insurance program, with continuation of the marketing loan program and a catastrophic revenue loss program based on county level losses for each crop. We are confident our approach can easily be tailored to meet the committee’s goals to provide a safety net that meets regional and commodity differences while also meeting the established savings target.”
Under AFBF’s plan, each producer of a program crop, as well as producers of apples, potatoes, tomatoes, grapes and sweet corn, would be provided a coverage level equal to 80 percent of the last five years’ Olympic average county revenue – that’s a 10% increase from the 70 percent level AFBF previously discussed.
Stallman explained that after receiving numbers from the Congressional Budget Office for a 70 percent program, “we now believe it is possible to provide support at the 80 percent revenue level of coverage for all program crops and the five fruits and vegetables. In addition we believe there would be enough money to increase the coverage for those participating in the Noninsured Assistance Program (NAP) from 50 percent loss coverage to 70 percent.”
“This would save $15 billion from the commodity title to apply towards budget deficit reduction,” he pointed out. “To be clear, this is based on the premise of eliminating authority for the direct payment program, the counter-cyclical program, Supplemental Revenue Assistance Payments (SURE) and Average Crop Revenue Election (ACRE), as your draft bill proposes.”
For the full text of the letter, click here.
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