Multi-Legged Stool Best Approach for Farm Bill

American Farm Bureau Federation President Bob Stallman testified Wednesday before the House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management to reiterate AFBF’s priorities for the 2012 farm bill and suggest enhancements to the current farm bill and the Senate Agriculture Committee-passed farm bill.

Stallman’s testimony was based on the premise that the House Agriculture Committee will draft farm legislation that reduces spending by $23 billion over the next 10 years, with proportional cuts of $15 billion in commodity program reductions, $4 billion in conservation program reductions and $4 billion in nutrition program reductions. Stallman called for a Supplemental Coverage Option whereby row crop and specialty crop producers could purchase a county-level, revenue-protection policy on top of their individual crop insurance coverage to cover all or part of the farmer’s deductible. Also, restoring non-program crop disaster programs such as the Livestock Indemnity Program, Livestock Forage Program and Tree Assistance Program would help those producers deal with catastrophic losses.

“Continuation of a multi-legged stool remains the best approach for providing a fair and effective safety net, which should consist of a strong crop insurance program, continuation of the current marketing loan provisions and a catastrophic revenue loss program,” said Stallman. The purpose of the hearing was to review commodity programs and crop insurance options for 2012 farm bill.” said Stallman

In its farm bill proposal, AFBF has prioritized (1) protecting and strengthening federal crop insurance funding and not reducing funding for that program; (2) developing a commodity title that encourages producers to follow market signals rather than making planting decisions in anticipation of government payments; and (3) refraining from basing any program on cost of production.

“These deep loss events that would endanger the financial survivability of the farm are typically beyond any producer’s control, and, in the past, have prompted enactment of ad hoc disaster programs,” Stallman said. “Our plan focuses on protecting farmers from these situations and brings program benefits into play only when they are needed, rather than being considered a supplemental source of annual income.”

The letter stated, “The renegotiation of the Standard Reinsurance Agreement resulted in a $6 billion reduction to the program, with $4 billion in savings applied to deficit reduction. We believe additional reductions would seriously affect producer access to crop insurance coverage and threaten efficient private-sector delivery following disasters.”

Earlier this week, Farm Bureau signed on to a letter urging the House to support the crop insurance program with most of the other commodity groups and farm organizations, including the American Soybean Association, American Sugarbeet Growers Association, National Association of Wheat Growers, National Barley Growers Association, National Corn Growers Association, National Cotton Council, National Farmers Union, National Sorghum Producers, National Sunflower Association, U.S. Canola Association and USA Dry Pea & Lentil Council.

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