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Has time come for revenue counter-cyclical program?

The only congressional body to write language for the new farm bill voted to extend the 2002 law for five years. But policy experts and lobbyists aren’t giving up on changing the legislation.

A group of widely respected agricultural economists, farm leaders and former USDA officials wrote the chairmen of the House and Senate agriculture committees urging them to include a revenue counter-cyclical program in the new farm bill.

They say revenue-based counter-cyclical programs would provide assistance to farmers when prices or yield are low. Observers from Agriculture Secretary Mike Johanns to National Corn Growers President Ken McCaulay believe the current price-based CCP doesn’t help when yields are low.

The House General Farm Commodities Subcommittee rejected revenue-based CCP and other “reform” ideas when it voted to extend the commodity title of the current law. The full ag committee was expected to take up that language June 17-19 and the full House to vote on it July 26.

The Senate Committee on Agriculture, Nutrition and Forestry hasn’t held public votes on the farm bill, though Chairman Tom Harkin says the committee expects to complete a bill and send it the Senate floor, to conference and to the president before the 2002 law expires Sept. 30.

Revenue counter-cyclical proponents think they still have a chance for their proposal either in the full House committee, the House floor or in the Senate ag committee.

“Existing programs are complex, often failing to provide protection when needed most, as evidenced by the need for disaster assistance,” said the authors, who include ag economists Bruce Babcock, Iowa State University, Kansas State University’s Barry Flinchbaugh, and Ohio State University’s Carl Zulauf.

“A revenue protection program would repair the holes in the current safety net and provide better protection by targeting revenue (price times yield) rather than price. A revenue protection program can be designed to treat all program crops equitably, be more market-orientated and improve long-term international competitiveness.”

(Other authors: former National Corn Grower Presidents Varel Bailey, Lee Klein and Fred Yoder; Wheat Growers President Bill Flory; and former Agriculture Secretary Clayton Yeutter and Deputy Secretary Richard Rominger.)

Other farm bill ideas are expected to show up. Rep. Ron Kind’s Food and Agriculture Risk Management Act almost certainly will be introduced when the new farm bill reaches the House floor.

Proponents of other legislation hope their ideas will make it into Harkin’s farm bill when it gets introduced. Among those: reducing direct payments and lowering payment limits and transferring the savings to conservation and energy programs.

Farm organizations such as Plains Cotton Growers have been busy scheduling flights to Washington to weigh in on the farm bill. The American Cotton Producers and the Cotton Foundation took the unusual step of postponing their Aug. 1-2 meeting for two weeks because of the House votes.

With the cost of hotel rooms and airfares these days, you can see how serious those members are taking this debate.


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