DR. GARY SCHNITKEY TESTIFIES AT FARM BILL HEARING
Yesterday, the U.S. House of Representative Subcommittee on General Farm Commodities and Risk Management held a hearing, seeking comments on the draft Farm Bill passed through the Senate Ag Committee. (For more information on that bill and its implications for Illinois farmers, click here.) Our Illinois farm policy expert, Dr. Gary Schnitkey from the University of Illinois, testified at that hearing, presenting a mainly positive view of the current draft. The draft Farm Bill works well with crop insurance, maintains a revenue-based safety net, and minimizes the impact on the federal budget.
One of the questions that has plagued the Farm Bill debates is this: is the program fair and equitable across all crops and all regions?
“According to Congressional Budget Office numbers, payments on ARC [Agricultural Risk Coverage – the draft Farm Bill] would be roughly proportional to crop value, 2-5 percent. That obviously is different from the way payments are made now based on base acres and direct payment rates so that would differ and whether or not that is equitable or not is something for you all to decide,” said Dr. Gary Schnitkey in his testimony.
You can stream the full video of the hearing by clicking here.
In a second portion of the testimony, Linda Ruan, Chairwoman, USA Rice Producer's Group, spoke against the Senate drafted bill, concluding that the new draft was not fair and equitable among all crops and all regions. She speaks directly to the goal of the House Ag Committee, but let’s further investigate exactly why rice producers and some other southern farmers view the program as inequitable.
Rice producers testified that they want to maintain options and that the current Farm Bill draft favors only two commodities and only one region of the state. The truth is that rice producers want to maintain a support level based on 1980-1983 planted acres and do not favor a bill that works along with market signals.
Based on acres planted more than 30 years ago, rice farmers maintain better risk management than they can on acres planted today because rice acres are decreasing. The market has driven this change, despite the U.S. Government incentives to do otherwise.
Illinois Corn advocates a program that works along with the market and encourages growth in commodities and planted acres that is market driven, not a program that works against market forces and that the market must overcome.
Where rice producers seek to gain the upper hand is in the desire of the House Agriculture Committee to pass a bill that is fair and equitable across all commodities and all regions. Rice producers argue that they will not maintain their fair and equitable portion of the government pay-out based on the 2008 Farm Program. Illinois Corn believes that the new Farm Bill draft would actually offer them the same fair and equitable safety net based on market driven shifts in acreage and crops.
Which is the correctly philosophy? Should the Farm Bill safety net be bases on what farmers planted 30 years ago? Or should it include trends in acre shifts driven by market forces these last three decades? Your elected officials will decide, but Illinois Corn will continue to advocate for a farm program that does not guarantee producer profitability, that operates within the constraints of the Federal budget, that works with crop insurance programs, and that encourages a market driven agricultural industry in the U.S.