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Lucas vows not to support bad ag policy

Waiting until summer for farm bill debate is better than bad legislation now. Direct payments issue offers big target. Revenue assurance programs may replace direct payments.

Congressman Frank Lucas, chairman of the U.S. House of Representatives Committee on Agriculture, would rather forego passing a hurry-up farm bill that jeopardizes the well-being of rural America and take his chances fighting for a better program next summer.

“I will not be a part of legislation that’s bad policy,” Lucas said during a telephone hook-up to the Texas Ag Forum, meeting recently in Austin.

The Texas Ag Forum is an association of key agricultural leaders and representatives from across the Texas food and fiber system. The Forum meets when appropriate to discuss crucial agricultural issues.

Lucas said farm legislation in the 1930s and 1980s represented “bad federal policy that almost destroyed agriculture in the Southwest. I will not give away a huge portion of rural America to get a bad deal. I’ll take my chances next summer.”

He admitted that waiting until summer would mean a fight.

Debate on the 2012 farm bill has been unusual, Lucas said. “In a normal year we would be holding field hearings at this point. This is not a normal year. We have the Super Committee (a committee equally divided between Democrats and Republicans, senators and representatives charged with reducing the deficit by $1.5 trillion) standing over our shoulders or behind us with a cattle prod,” Lucas said.

“We (both the House and Senate committees on agriculture) are doing our part to meet our responsibility of deficit reduction.  And we have a lot of members of Congress who have no clue where their food comes from.”

Lucas said he’s convinced that the ag committees can come up with $23 billion in farm bill savings. “We’re putting together a framework so we don’t have to depend just on the Super Committee’s numbers. We have a lot of discussions going on.”

50/50 chance for deadline

He said the possibility of getting a farm bill to the Super Committee by the November 1 deadline is “about fifty-fifty.”

Lucas said direct payments represent a big target. “The program is constantly under pressure from the national media and colleagues in both the House and the Senate. The direct payment program has opponents from both the hard right and the hard left and those further away from rural America.”

He said a group of freshman House members “came here to reduce spending and they don’t care where they reduce it. And a number of nervous senators are running for re-election.

Lucas said he may be “the last defender of direct payments in Washington. It’s the least distorting within WTO.”

He says programs such as the Conservation Reserve Program, which “pays producers to grow grass — are considered good, but with direct payments we maintain the ability to produce food and that’s bad. It makes no sense.

“Maintaining the productive capacity of agriculture in this country is as important as maintaining the ability to produce ICBMs (inter-continental ballistic missiles).”

Lucas said members of both House and Senate ag committees, along with input from commodity organizations, are looking at options to replace direct payments and maintain some kind of safety net. Some program featuring revenue assurance seems most likely.

“But the farm bill is still about raising food and fiber to feed and clothe the country and the world,” Lucas said. “We have to keep farm in the farm bill. It has become a feeding program.”

He said commodity programs should not take all the cuts. “We also have to consider conservation and nutrition,” he said. “Some colleagues see nutrition as ‘carved in stone,’ but we still have to keep products on the shelves or nutrition programs have nothing to buy.”

Lucas believes a farm bill “should work for everybody — cotton in West Texas and corn in Iowa. Our challenge is to maintain equity in every part of the farm bill and also within commodities and regions.”

He said the Renewable Fuel Standard already gives one commodity a “huge advantage.”

Several forum participants, representing key leadership from Texas’ broad-based farm and ranch interests, as well as critical agencies and educational units, expressed concern for a safety net that relies on historical or olympic yields and commodity prices instead of a consistent, if minimal, revenue floor.

Revenue Plan concerns

“We are concerned about a revenue plan,” said L.G. Raun, a Texas rice producer and leader in the rice industry. “The fatal flaw in a revenue program is that we have to rely on historical prices.”

He said a period of sustained low prices would be ruinous to rice producers and the safety net would disappear. “The direct payment,” Raun said, “is very bankable.” He explained that with assurance of the direct payment a producer can show lenders at least a minimal cash flow.

“Without the direct payment, we’re concerned about bankability,” he said.

Lucas agreed that revenue assurance leaves gaps. He said he understood the uncertainty of agriculture and that good years are often followed by bad ones and crafting a program based on higher valued commodities leaves producers more vulnerable.

He offered the possibility of Congress having to revisit a farm program if prices deteriorate. He also said that Congress would be under extreme pressure for the next five to 10 years to hold expenses in check.

 “The $23 billion savings is achievable,” Lucas said. “But it’s sheet ice we’re sliding on. And to achieve that savings, significant things must happen and there is a big bulls-eye on direct payments.”

He said the Super Committee is not “stacked in favor of the countryside. But it reflects the flavor of the country.” The committee may take up ag spending or leave it to Congress’ ag committees. “It may decide to do something, do nothing (with ag) or not get a bill. But the administration will push the Democrats on the committee and Republicans want to get a bill. We’re traveling in uncharted waters. But I’m working with the other three principals on the ag committees.”

Steve Verett, executive vice president, Plains Cotton Growers, told Lucas that farmers “need some kind of reference price” included in the safety net. “It only takes one or two years of low prices to ruin a farmer. That will happen sooner or later.”

He also thanked Lucas for his leadership. “It’s a comfort to know that we have people who have our backs and keep our interests in mind,” he said.

Lucas said the national media, as well as many legislators, have a skewed view of how agriculture works in the country. The past few years of good yields and high commodity prices created an impression that farmers are making huge profits and no longer need the safety nets that have served them well in past farm programs.

“We have had decent weather for the past five years, with the exception of the drought in the Southwest this year,” Lucas said. That string of good years, added to pressure to reduce the deficit and constant criticism from the national media, puts farm programs in the crosshairs of budget hawks, Lucas said.

“This is a tough time to write a farm bill.”

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