Tuesday, October 29, 2013

Farm Bill talks must meld regional crop interests, but avoid making them look too greedy

Food stamps are the big divide in the Farm Bill conference committee that starts meeting at 2:30 p.m. ET Wednesday, "but the commodity title is its own battleground," David Rogers of Politico reminds us. "Negotiators are looking at new alternatives to better align the House and Senate commodity titles and reduce the cost of rival revenue insurance plans to protect against shallow losses."

The House has indicated it would increase deductibles in its favorite crop-insurance plan to 15 percent if the Senate would so likewise with its pet plan. The deductibles are now at 10 and 12 in the House and Senate bills, respectively. "The choices illustrate the challenges for lawmakers as they try to craft a new safety net to replace the current system of direct cash payments that will be ended under both bills," writes Rogers, who has covered many such talks.

The Senate plan reflects the desires of corn and soybean interests "allied with Midwest Republicans," while "The House measure reflects more Southern agriculture," which includes rice, cotton and peanuts and has a different recent history, Rogers explains: "Southern growers have not enjoyed the same boom as the Midwest where land prices have soared with the demand for ethanol," made from corn. Southern farmers "typically don’t buy high-end coverage," and the House plan would not only be cheaper for them but includes "a significant counter-cyclical program tied to target prices."

Congress had been moving away from such programs, but that changed when Sen. Thad Cochran of Mississippi became top Republican on the Senate Agriculture Committee. The Senate wants to let farmers take advantage of both programs, but that "would require scaling back individual elements. And the House would be under pressure to lower its target prices, which are significantly higher than the Senate’s for wheat, corn and soybeans," Rogers notes. "But the greatest political danger to an 'all-in' approach is perhaps that the combination of programs will seem excessive." (Read more)

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