Friday, April 22, 2011

Farm Bill negotiators face North-South split between direct payments and other subsidies

The original battle line of the Civil War is shaping up to be a key divider in the debate over the 2012 Farm Bill, the weekly Washington newsletter Agri-Pulse reports: "In what appears to be a strong difference of opinion between Northern and Southern growers over the continuation of direct payments, some are suggesting that growers should be able to choose" between such payments and a revised Average Crop Revenue Election program.

"One idea that’s being floated by some safety-net stakeholders is to enact farm policy that would give grain, soybean and cotton growers the option of choosing between direct payments and a more flexible ACRE or crop insurance program," Agri-Pulse reports. Under that scenario, Midwest farmers would likely opt for enhanced risk management tools and Southern farmers would elect to continue to receive direct payments, which some Midwest farm interests have said they could live without. (Gary Schnitkey of the University of Illinois explains why every farmer should consider enrolling in ACRE before the June 1 deadline. UPDATE, May 16: Economists from the University of Kentucky College of Agriculture will explain ACRE at a series of meetings May 19 in Hardin and Marshall counties and May 20 in Christian and Henderson counties. Check local Extension offices for details.)

"How such an 'opt-in' menu of programs would be structured remains to be seen," Agri-Pulse advises. Farm group leaders and lobbyists met last week to prepare 2012 Farm Bill negotiations, but no new program or consensus approach for the safety net emerged from the meeting. National Farmers Union President Roger Johnson said "everybody is beginning this discussion with the assumption that there will be substantially less money to write the next farm bill." He said farm programs also face a perception problem. "There is this presumption -- in the urban press in particular -- that if prices are good today, they're going to be good tomorrow, and next year and ever after, even though we all know that's not true," he told Agri-Pulse. Agri-Pulse is subscription-only, but offers a free, four-issue trial subscription.

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