FAQ: The National Corn Growers Association and American Soybean Association have weighed in with what they want Congress to include in the 2012 Farm Bill. NCGA is pushing it's proposal for a new risk management program, called the Agriculture Disaster Assistance Program or ADAP. ASA is proposing a program it calls Risk Management for America's Farmers or RMAF. Please give us an overview of each.
Answers: Provided by the National Corn Growers Association, and by the American Soybean Association.
NCGA Proposal For 2012 Farm Bill: The National Corn Growers Association on September 13, 2011 unveiled the Agriculture Disaster Assistance Program or ADAP, a commodity title proposal for the 2012 farm bill that will modify and replace the existing Average Crop Revenue Election Program or ACRE. NCGA says ADAP will provide a more effective and responsive farm financial safety net for growers.
"Responding to a charge by our voting delegates to investigate transitioning direct payments into programs that allow producers the ability to mitigate risk, our grower-led Public Policy Action Team developed a crop-specific, revenue-based risk management tool that provides a safety net when growers are facing a loss," says NCGA President Bart Schott. "We are focusing on simplification and faster delivery of assistance when it is needed."
Focus is on program simplification and faster delivery
ADAP builds on the existing structure of ACRE and is designed to address the need for simplification and elimination of overlapping coverage with individual crop insurance. Changes include the use of harvest prices and crop reporting districts to set the crop revenue guarantee and would establish a guarantee based on the five-year Olympic average of revenue.
Payments would be limited to 10% of the guarantee, based on planted acres and adjusted to a farm's yield. Payments would cover lost revenue between 85% to 95% of the guarantee. Marketing loan rates would be restored to standard levels, rather than being reduced by 30% in ACRE.
Growers need a program that can address gaps in coverage
"While today's farm bill provides critical assistance to farmers when they face a significant loss, growers also need a program that can efficiently address gaps in protection that cannot be addressed by federal crop insurance alone," he says. "ADAP will assist in streamlining those goals and ensure farmers are better protected when revenue is lost due to crop disease, volatile commodity markets and adverse weather across multiple years." For more information, visit www.ncga.com.
ASA Proposal For 2012 Farm Bill: The American Soybean Association on September 29, 2011 released its proposal for the 2012 Farm Bill, a program they're calling Risk Management for America's Farmers or RMAF. ASA says the savings in government spending resulting from this program would be used for agriculture's share of federal deficit reduction.
"This proposal will help farmers manage the risks they face from adverse weather, crop disease and volatile commodity markets," says ASA President Alan Kemper, a soybean grower from Lafayette, Indiana. "ASA believes the current farm program safety net can be made more effective, efficient and defensible by reallocating baseline funding to this revenue-based program that improves risk management and complements crop insurance. Because the proposal would replace current farm programs, this proposal would also result in savings that help agriculture contribute its fair share to deficit reduction."
Commodity specific revenue benchmarks for individual farmers
The "Risk Management for America's Farmers" program, or "RMAF," would partially protect revenue losses by farmers of soybeans and other program commodities that result from low prices or reduced yields for their crops. The program would establish commodity-specific revenue benchmarks for individual farmers based on historical yields and prices, and compensate them for part of the difference when current-year revenue for a commodity on their farm falls below a percentage of the benchmark.
All planted and prevented planted acres would be covered under the plan. RMAF would complement the existing crop insurance program used by most farmers, which ASA strongly supports and believes should be continued. More details on the plan can be found on ASA's website www.soygrowers.com/policy/ASA-RMAF.pdf
Farmers want a program that uses a "farm level" trigger
"ASA supports a risk management program that partially offsets shallow revenue losses at the farm level not covered by crop insurance," says ASA Farm Bill Task Force Chairman Rob Joslin, a soybean farmer from Sidney, Ohio.
"Farmers told ASA they want a program that operates off a farm-level revenue loss trigger rather than a state, Crop Reporting District, or even county loss trigger. Farmers told us that the use of a state-level revenue loss trigger in the current Average Crop Revenue Election (ACRE) program was one of the problems they saw in that program that resulted in low participation rates. I want to thank the members of ASA's Farm Bill Task Force, who were from all soybean growing regions, for their work in listening to their fellow producers and for crafting this risk management proposal," says Joslin.
Indications are RMAF would likely cost a lot less than ACRE
According to Kemper, "Preliminary indications are that RMAF could cost significantly less than the existing ACRE, the Supplemental Revenue Assistance Payments Program, Direct Payment, and Counter-Cyclical programs, resulting in savings that can be used to meet part of agriculture's share of deficit reduction required by the Budget Control Act."
Kemper adds "while ASA strongly supports federal support for on-farm conservation practices, given the cost of these programs, we believe they need to be included in helping to meet agriculture's share of deficit reduction. Thus, for that for that portion of spending cuts that does not come from other farm bill titles, ASA is suggesting spending reductions should come equally from commodity and conservation programs."
ASA strongly opposes any move to cut crop insurance funding
"ASA supports efforts to address our nation's debt through a comprehensive and balanced approach to deficit reduction that includes cuts to all areas of federal spending," says Kemper. "Farmers are willing to do their fair share to contribute to these efforts, but cuts to agricultural spending should not be disproportionate." The ASA President concluded his remarks by emphasizing that "federal crop insurance is the core of agriculture's safety net, and has already contributed to deficit reduction. ASA will strongly oppose any proposal to further reduce crop insurance funding."
If you have specific questions or need details on USDA farm programs, contact your local USDA Farm Service Agency or other appropriate USDA agency office. And be sure to read the regular column of "Frequently Asked Questions about the Farm Program" appearing in each issue of Wallaces Farmer magazine and at www.WallacesFarmer.com.www.WallacesFarmer.com