The Senate is hard at work on the new farm bill, and one key amendment has already been voted down. The amendment would have killed the sugar program which includes tariffs and other controls - not funded by tax payers - to manage supply and price. Long a target of the candy and soft drink lobby, this measure survives by a 50 to 46 vote.
In a statement after the vote, Sen. Mike Crapo, R-Idaho, issued a statement noting that the program brings in more than $1 billion in revenue to his state alone. In his floor statement, ahead of the vote, Crapo says that consumers in the rest of the world pay 14% more for sugar on average. Crapo, who is also co-chair of the Senate Sweetener Caucus, notes that claims of sugar shortages do to the program fly "in the face of reality. U.S. farmers and producers have proven themselves time and again to be the most efficient in the world.
While regional differences in the Senate bill need to be worked out, there's also a concern about more than 220 amendments filed with many not germane to the farm bill itself. Jeff Scates, president, Illinois Corn Growers Asociation, issued this statement regarding the Senate measure: "The Illinois Corn Growers Association has been and continues to be active in the 2012 Farm Bill debate and has led efforts to include an improved revenue-based safety net and preserve crop insurance as a farmer-favored form of risk management. As Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) negotiate which amendments will be offered to the Farm Bill, S. 3240, we believe that only germane amendments should be considered on the Senate floor. Non-germane amendments could delay or derail passage of the bill."
Scates says his organization opposes any amendments that reduce risk management opportunities through crop insurance for corn farmers. He adds that "we need the Farm Bill now."
Looking at costs
The Congressional Budget Office released its review of the Senate measure last week ahead of that cloture vote. And the University of Illinois Farmdoc Daily blog has crunched the numbers. The table on this page details the savings in the Senate's version of the 2012 Farm Bill. The biggest savings come from the end of direct payments, which may impact Southern growers more.
Source: University of Illinois
Essentially spending on the Senate version is 38% below spending on the 2008 Farm Bill. Whether the final version will score the same way will be interesting.
One area of the new farm bill under consideration includes payment limits, which may cap the payments a farmer receives based on total farm income. Or there's talk of means testing and an amendment form Senators Tom Coburn, R-Okla., and Richard Durbin, D-Ill., would impose a means test and limit crop insurance protection based on the results, according to a release from the National Council of Farmer Cooperatives.
In the media statement, Chuck Conner, NCFC president and CEO, notes that while agriculture has been a bright spot in "an otherwise dim economy over the past few years, anyone from farm country though, knows that the ag economy is highly cyclical - today's highs can easily turn into tomorrow's lows. The unpredictability of weather and turmoil in global markets can lead to equally volatile farm gate prices, yields and costs of production."
Conner says that given those realities, moves that would not maintain an adequate safety net and sound risk management tools would be "penny wise and pound foolish."