The Lugar plan, essentially a subsidized insurance program, would phase out and ultimately eliminate the marketing loan program that Cochran authored as part of the 1985 Farm Bill. The marketing loan is considered by many to be one of the most effective measures in recent era farm programs.
“Sen. Lugar’s bill provides, in effect, an insurance program for all of agriculture,” Cochran told members of the Southern Crop Production Association at their annual convention in New Orleans.
It would phase out all of the specialty crop programs and substitute for all producers a program that would give them vouchers representing 45 percent of the cost of the insurance premium, with the farmer paying the balance.
“This would be an incentive to farmers to buy insurance, which would provide a guaranteed payment of 80 percent of the value of whatever crop the farmer is producing — and that’s it,” Cochran said. “If you don’t average over 80 percent of the value of the crop that’s insured, then you get a government subsidy to make up the difference.
“It’s simple, it’s easy for everyone to understand, and it gets us away from the disaster assistance program. The marketing loan I authored, would be phased out completely.
“So, this is a major departure — and it has the early support of the administration in concept. They’re not signing off on all the details right now, but Mitch Daniel, director of the Office of Management and Budget, seemed to be speaking for the administration in supporting the Lugar approach as something that ought to be carefully considered by Congress as being preferable to the existing farm programs and the bill that has been passed by the House.”
President Bush, Cochran said, “appears to be caught in an interesting dilemma. Larry Combest, R-Texas, is chairman of the House Agriculture Committee and the president has a natural tendency to want to support the work product of his home state congressman. But he’s at odds with his administration’s approach for federally controlling so-called ‘runaway spending in agriculture’ and defining a program that is more nearly reflective of an approach that is across-the-board for agriculture producers, no matter what crop or activity they’re engaged in.”
Cochran said the ad hoc, stopgap emergency funding of recent years has “seen billions of dollars appropriated, with a consensus of Congress that these expenditures were needed to help support this nation’s very vital farm sector and keep farmers in business, producing for the nation’s benefit.”
But, he said, the goal continues to be to move to a “more predictable way of supporting agriculture,” as with the Lugar proposal.
So how’s all going to come out? What’s the Senate Agriculture Committee going to do?
“It may be reflected in the activity so far of our new committee chairman, Sen. Tom Harkin, D-Iowa,” Cochran said. “In a talk with him, I found that we’re not going to have a bill presented by the chairman, as we usually do. Rather, he’s going to have a series of sessions with the committee, in which we’ll look at one particular subject, such as conservation.
“I presume he’s going to propose a title for a section of the bill and have a committee draft for us to review before we begin meeting, and then he’ll entertain suggestions for amendments. I guess we’ll proceed as in a markup session, but just on that section of the bill. Then, as we get toward the end of the process — and who knows when that will be — we would not have any commodity programs.”
Thus, Cochran said, “we’d push off to the future any consideration of the most controversial and certainly the most critically important item for production agriculture — the commodity programs.
“So, that’s what we’re seeing in the Senate committee, and I assume we’ll proceed with that process beginning in the next week or so.”