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Will House Agriculture Committee rectify Senate farm bill flaws?

Arkansas Farm Bureau president discusses Senate farm bill. House Agriculture Committee expected to produce farm bill version friendlier to southern agriculture. Senate version impacts to southern agriculture, farm organization, landlord relationships, rice, cotton, peanuts, irrigation and more.

After a farm bill passed out of the Senate Agriculture Committee on April 26, focus has shifted to the House version. That’s especially true in the South, where agriculture leaders expect the House bill to be friendlier to the region than what will soon hit the Senate floor.

“I think it’s pretty telling that four of the five ‘no’ votes on the (Senate Agriculture) Committee were from southern senators,” said Randy Veach, Arkansas Farm Bureau President, the day after the bill’s passage. “That sends a message that this bill does not contain an adequate safety net for southern agriculture.”

For more, see here and here.

Veach, who farms in northeast Arkansas, also spoke on new qualifying requirements for government programs, how farms will be impacted and holding House Agriculture Committee leadership to past promises. Among his comments:

On the Adjusted Gross Income (AGI) test dropping to $750,000 and the qualifying wording changing from “active personal management” to “actively engaged”…

“The $900,000 (qualifying amount) was a concern and the $750,000 is of even greater concern. With the extremely high input costs in southern agriculture, the cost of making payments on a $700,000 cotton picker and $500,000 combine, … land payments, you have to have an AGI of a high amount to make those payments. That AGI is of great concern…

“As for ‘actively engaged,’ I’ll use myself as an example of what can happen. I crop-rent over 2,000 acres in my operation.   

“This is a big change – the landlords won’t be able to participate. When that happens, they won’t take less rent. That means I’ll have to make up the difference.

“So, not only am I losing a lot of the benefits of a safety net – like a direct payment and counter-cyclical payment – but I’ll have to turn around and compensate my crop-rent landlords for their inability to draw any kind of money from the safety net for their portion of the crop. That’s a big, significant problem.”

On H2A and the Arkansas Farm Bureau’s position on farm labor…

“We need a good guest worker program that isn’t cumbersome. We want people to be legal in order to work in agriculture. But we can’t continue to operate without a good guest worker program.”

For more on farm labor and guest workers, see here.

More on the safety net…

“This bill does not provide an adequate safety net for southern commodities. It eliminates direct payments, counter-cyclical payments and a couple of other programs that aren’t as big a problem for us. But (the elimination) of direct and counter-cyclical payments (is a big problem).

“Direct payments are decoupled as far as WTO goes. But the big impact – on the state of Arkansas, for instance – is that’s $244 million that goes out of the agricultural and state economies. That (impacts) about 1,952 jobs.

“This bill doesn’t replace any of that money in any way. There’s (nothing) that will help take care of the loss of direct payments and counter-cyclical. Of course, counter-cyclical payments haven’t come into play lately because of high market prices.

“But when we cripple southern agriculture with a non-safety net-type program … it will directly affect the availability and affordability of food, fiber and shelter. When that happens it will affect the whole economy of this nation drastically.

“Southern agriculture provides a large, large percentage of the products that allows our nation a great, affordable, safe, abundant supply of food, fiber and shelter. When you cripple agriculture financially then you’ll lose those wonderful products we have out there. Southern agriculture is a huge player in that.

“Arkansas is the Number One rice-producing state in the United States. It (produces) almost 50 percent of the rice produced in the nation. Rice is a staple for the entire world and we export about 50 percent of that (crop).

“So, not only will it affect the nation but the world, as well. As a whole, the world is looking at one of the greatest hunger crisis that we’ve seen. (The Senate bill) would hurt not only the state of Arkansas, southern agriculture … and our nation, but people around the world.”

STAX, rice, plans

On cotton and STAX…

“I think that STAX does work well for some cotton producers, especially for dryland cotton producers. I have some dryland cotton myself and it’ll work well in those areas.

“But we’ve mitigated a lot of risk due to irrigation. This is not as good a safety net as we’ve had in the past.

“Also, when you couple that with some of the provisions inside this bill – especially when you add in the AGI and ‘actively engaged’ when you have landlords to take care of – it really dilutes the safety net of even the STAX program.”

On minimum reference price for rice being set at $13 per cwt. and minimum reference price for peanuts set at $530 per ton…

“What we have to focus on is what can be done to make this work for southern agriculture. When it gets to the Senate floor, we’ve got to be very actively engaged…

“When we talk about a good marketing loan program with rates that better reflect current marketing prices and also a target price that better reflects where we are in the market, then a counter-cyclical payment that will help provide and take care of some of the loss that has come from direct payments. Those are some of the issues we have to look at.

“They keep talking about crop insurance or risk management tools that are also revenue-based. What we’re looking at now does not work for most of southern agriculture, especially rice. We have to look at changes in those to make them work better.

“I know a lot of this works well for the Midwest. That’s great. But we must be more diverse, more flexible and provide some kind of safety net for southern agriculture.

“I also want to say that in dealing with the … $13 per hundredweight … depends a lot on what it’s based on. If it’s on actual planted acres and bushels you’re producing, then that’s where we have to be. But if you’re going to cut that by 85 percent, or so, of your acreage – and it could be even lower than that if you go by base acreage – and an Olympic average on yields, the way it’s figured will make a huge difference. If you use some kind of formula like that, that $13 eventually gets down to about $10 when you’re not on actual planted acres and yields.”

On plans for southern state Farm Bureaus from here…

“We’ll be working closely with (Arkansas) Sen. Boozman and Sen. Mark Pryor in trying to work out some changes in the bill on the floor.

“Historically, the farm bill has been written in the House. This is kind of a change that the Senate would come out of committee with a bill before the House. Usually, the House puts together a bill and the Senate tweaks that and makes changes.

“We’ll be actively engaged and will (travel) to Washington if we need to. We’ll be working with our senators like the other southern states will work with theirs. If we need to be there, we will be there testifying or whatever is needed…

“We’ll also be working hard to get the House bill to provide some kind of safety net. (Oklahoma Rep. Frank Lucas, chairman of the House Agriculture Committee) has committed to us one-on-one and in the media to a safety net that covers all commodities in all regions. I believe the House version will provide a choice for farmers, price protection programs, and will focus on commodities and regional differences. That’s what we’re looking for out of the House.

“Then, hopefully, we can improve the Senate (version) and make changes that will provide a safety net for southern agriculture. Hopefully, we’ll be successful there.”

Anything else?

“Right now, I’m applying urea fertilizer and paying $800 per ton. Energy costs are high. We’re looking at extremely high input costs.

“Again, we mitigate a lot of risk through irrigation. So, we have an extra input cost that, for the most part, the Midwest doesn’t have. That’s one of the regional differences we keep talking about.”

For more farm bill coverage, see here.

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