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Farm Bill Hearing Focuses on Commodities and Risk Management

Farm Bill Hearing Focuses on Commodities and Risk Management

Final Senate hearing on 2012 Farm Bill will hear from wide range of growers and organization leaders.

During her opening statement at the Senate Agriculture Committee Hearing on the farm bill Thursday, Chairwoman Debbie Stabenow, D-Mich., told those gathered that her top priorities for the next farm bill was reforming farm programs and strengthening crop insurance.

"Every planting season, America’s farmers take a huge gamble that their investment will pay off - that the sun, the rain, and the markets will come together in just the right combination so they can make a living and support their families," Chairwoman Stabenow said. "We cannot forget that high commodity prices are of absolutely no use to a farmer whose crop was lost in a drought or flood. One storm can wipe out an entire crop and jeopardize a farm in a matter of minutes - whether that crop is cherries in Michigan or wheat in Kansas."

First up to testify in the hearing was USDA Acting Undersecretary for Farm and Foreign Agricultural Services Michael Scuse. He talked at length about the challenges that today's farmer and ranchers face.

"Currently, agriculture is a bright spot in our economy, contributing one in every twelve jobs in America. Record high crop prices are providing great opportunities and have resulted in record income for farmers, falling farm debt, and growth in farm equity," Scuse said. "However, agriculture also faces new challenges and pressures. Our farmers and ranchers today are faced with two primary risks as they produce our food: price volatility and production losses due to natural disasters or pests."

Prices for agricultural commodities over the past five years have exhibited wide swings from extreme lows to strong highs. During the recent high prices for commodities the cost of production has also increased.

"High input costs has made it more costly to farm," Scuse said. "For example, the average variable cost to plant and harvest an acre of corn has doubled in nominal terms between 1997 and 2011, and increased by over 80% for cotton. These high input costs increase the financial risk involved in agricultural production, and further underscore the need for a strong safety net."

Scuse discussed the need to strengthen crop insurance, the importance of USDA programs to help young and beginning farmers in light of high credit, and USDA's willingness to work with Congress to simplify farm programs and make sure the next farm bill provides the needed components for farmers and ranchers.

"As we look to the future, the volatile market and weather conditions of recent years underscore the importance of providing an adequate safety net to producers," Scuse said. "We look forward to working with you and providing any technical assistance that Congress needs in developing the next farm bill."

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