"These next two weeks running up to Thanksgiving are pivotal if a Farm Bill is to be salvaged this year," David Rogers reports for Politico.
House Agriculture Committee Chairman Frank Lucas told K-101-FM in Woodward, Okla., yesterday that the House and Senate have three major areas of difference — commodity subsidies, the dairy program and food stamps, Keith Good reports for Farm Policy. On dairy, the difference is not just between the two chambers, but between farm-district Republicans and their leaders in the House.
"The House leadership doesn’t want to do supply management, which makes the dairy insurance work better," Lucas said. "The Senate insists on that. That’s a philosophical issue about supply management by the federal government." On food stamps, he said, "The Senate wants to save about $4 billion by basically making the Northeastern states that use food stamps to help pay for their citizens’ home heating oil to stay warm in the wintertime to pay more. The Senate essentially just doesn’t want to make any changes in food stamps. The House wants to do 10 times as much, so working that out is going to be tough."
Lucas called the commodity title the biggest factor, saying the Senate has "finally come around to the fact that you have to have a safety net that works not just for the Midwest but for everybody else. They want a program by which, when you sign up for five years, you’re automatically covered under either version of the safety net. The problem is, when you take the responsibility out, you also reduce the quality of the safety net. The House perspective is, let’s give people a choice between which way they go, let them choose for the five years. If they make the right decision, then the safety net will be stronger. If they make the wrong decision, well, they made the decision they made." (Read more)
Rogers focuses on a key commodity question, "target prices at the heart of a dispute over how to build a new safety net to replace the current system of direct cash payments to farmers, which has been the mainstay for the commodity title for almost two decades. The Senate tends to build its system from revenue on down. The House from production costs up. But each is prone to short cuts that can become a distraction in themselves."
"Calculations by Politico show that based on current market projections, wheat prices would have to drop 48 percent in 2014 before the Senate’s Adverse Market Payment plan would trigger. And the $3.66 per bushel reference price would still be 25 percent below a wheat farmer’s production costs—even after subtracting the value of his land and labor," Rogers writes. "On the opposite side, the House faces criticism for being too quick to count even a farmer’s labor and land investments in calculating production costs. Part of this is regional and reflects the House’s greater sensitivity to the almost feudal land ownership structure in some of Southern agriculture. But the end result is it pushes the House’s target prices up higher than the Senate is willing to go."
The main problem is the inability of the House and Senate to agree on the best way to approach the bill, Rogers writes. "The Senate focuses first on farm revenues—not costs. It concedes that the recent run of high commodity prices will end sometime, but the economic argument is that production costs—such as land and fertilizer—will also fall with time. The House would argue that it is better to err on the side of the farmer’s survival. And it is aggravated by the fact that the Senate invests so much in a 'shallow loss' program even as it is tamping down on target prices intended to build a floor against a real market collapse." (Read more)
UPDATE: Rogers reports "House Republicans were more upbeat Thursday on getting a Farm Bill done this year."
Meanwhile, the Department of Agriculture has a section on its Twitter page asking people to share what the Farm Bill means to them, and at noon ET Friday, USDA will have a live Twitter chat about the bill.
House Agriculture Committee Chairman Frank Lucas told K-101-FM in Woodward, Okla., yesterday that the House and Senate have three major areas of difference — commodity subsidies, the dairy program and food stamps, Keith Good reports for Farm Policy. On dairy, the difference is not just between the two chambers, but between farm-district Republicans and their leaders in the House.
"The House leadership doesn’t want to do supply management, which makes the dairy insurance work better," Lucas said. "The Senate insists on that. That’s a philosophical issue about supply management by the federal government." On food stamps, he said, "The Senate wants to save about $4 billion by basically making the Northeastern states that use food stamps to help pay for their citizens’ home heating oil to stay warm in the wintertime to pay more. The Senate essentially just doesn’t want to make any changes in food stamps. The House wants to do 10 times as much, so working that out is going to be tough."
Lucas called the commodity title the biggest factor, saying the Senate has "finally come around to the fact that you have to have a safety net that works not just for the Midwest but for everybody else. They want a program by which, when you sign up for five years, you’re automatically covered under either version of the safety net. The problem is, when you take the responsibility out, you also reduce the quality of the safety net. The House perspective is, let’s give people a choice between which way they go, let them choose for the five years. If they make the right decision, then the safety net will be stronger. If they make the wrong decision, well, they made the decision they made." (Read more)
Rogers focuses on a key commodity question, "target prices at the heart of a dispute over how to build a new safety net to replace the current system of direct cash payments to farmers, which has been the mainstay for the commodity title for almost two decades. The Senate tends to build its system from revenue on down. The House from production costs up. But each is prone to short cuts that can become a distraction in themselves."
"Calculations by Politico show that based on current market projections, wheat prices would have to drop 48 percent in 2014 before the Senate’s Adverse Market Payment plan would trigger. And the $3.66 per bushel reference price would still be 25 percent below a wheat farmer’s production costs—even after subtracting the value of his land and labor," Rogers writes. "On the opposite side, the House faces criticism for being too quick to count even a farmer’s labor and land investments in calculating production costs. Part of this is regional and reflects the House’s greater sensitivity to the almost feudal land ownership structure in some of Southern agriculture. But the end result is it pushes the House’s target prices up higher than the Senate is willing to go."
The main problem is the inability of the House and Senate to agree on the best way to approach the bill, Rogers writes. "The Senate focuses first on farm revenues—not costs. It concedes that the recent run of high commodity prices will end sometime, but the economic argument is that production costs—such as land and fertilizer—will also fall with time. The House would argue that it is better to err on the side of the farmer’s survival. And it is aggravated by the fact that the Senate invests so much in a 'shallow loss' program even as it is tamping down on target prices intended to build a floor against a real market collapse." (Read more)
UPDATE: Rogers reports "House Republicans were more upbeat Thursday on getting a Farm Bill done this year."
Meanwhile, the Department of Agriculture has a section on its Twitter page asking people to share what the Farm Bill means to them, and at noon ET Friday, USDA will have a live Twitter chat about the bill.
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