Tuesday, April 20, 2010

Looking at farm programs from a fresh perspective

Dan Looker, Business Editor for Successful Farming magazine reports that Agriculture Secretary Tom Vilsack will begin looking at possible changes to the 2012 Farm Bill starting next week.

That's when Agriculture Secretary Tom Vilsack will appear before the committee, followed a week later by academics and economists. Then, over a long weekend that starts on Friday, April 30, committee chairman, Representative Collin Peterson (D-MN) takes the show on the road, with hearings planned for Des Moines, Iowa; Boise, Idaho; Fresno, California and Cheyenne, Wyoming.

Over the past winter and spring, Peterson has made it clear that he expects finding the financial resources for farm programs to be tougher by 2012, as Congress wrestles with ways to cut a ballooning federal deficit.

On Friday, Peterson made it clear that he's doing this, not because he has any hidden reform agenda, but "to get people thinking ahead of time on where we should be going in the future."

And, he said, "My interest is in providing a safety net for the average commercial production farm out there."

"I've told people we should put everything on the table. It's nothing more than that," he added.

Peterson said that he wants the next farm bill to continue to offer a safety net for the commercial farms that produce most of the nation's food and that "I'm not coming from any one point of view."

Peterson looks at the complex mix of current farm programs that include direct payments, crop insurance, a permanent disaster program called SURE (SUpplemental REvenue Assistance Payments Program) and ACRE (Average Crop Revenue Election).
He's asking farm groups, "Is there a more productive way of providing a safety net."
Still, in a conference call with reporters, he did some interesting thinking aloud.
Peterson said there isn't enough money available from the federal budget to raise the loan rates for the Direct and Counter-cyclical Program (DCP) enough to make it work well as a safety net.

"The problem with the loan rates is that they're so low they're not really effective and we don't have the money to make them work. And that's why I think we should examine it," he said.

Peterson acknowledged that the signup for the ACRE program last year was small, partly because the program came out late (last August) and because it's complicated.
"I think we have to make it a county by county program instead of a state program," he said. And farmers should be able to assign potential payments from ACRE to a bank so that they could borrow against it for operating loans, he added.

Currently, farmers enrolled in the ACRE program do not get a payment on a crop unless their state has a drop in revenue and their farm has a drop in revenue.

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