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Proposed farm bill would end direct payments

Friday, June 15, 2012

PORTAGEVILLE, Mo. -- Changes to some USDA programs outlined in the farm bill now on the floor of the U.S. Senate may leave some Southeast Missouri farmers without a safety net.

The half-trillion-dollar Agriculture Reform, Food and Jobs act of 2012 seeks to save $23 billion in part by ending direct payments to farmers and modifying crop insurance programs. The five-year legislation would replace the current farm bill, which expires this fall.

Bootheel farmers who attended Thursday's farm bill forum hosted by U.S. Rep. Jo Ann Emerson, a Cape Girardeau Republican, at the University of Missouri Delta Research Center in Portageville said they aren't looking for help when prices are good but need assurance that when disaster strikes there will be assistance to get them through the crisis.

The Senate's bill would end the direct payments some farmers receive annually and countercyclical payments that go to farmers when prices fall below a targeted level set by USDA.

Instead those programs would be replaced with the Simplified Risk Management program, called a "shallow loss" program, that will help farmers when their revenue falls 11 to 21 percent below a five-year moving average. If a farmer sees a revenue loss higher than 21 percent, their regular crop insurance would pay for the losses.

Bootheel rice farmers say that type of program will help corn producers but leaves them unprotected because they don't encounter "shallow losses."

"You either have a failure to plant a crop or a more normal yield," said Paul Combs of Baker Implements in Cape Girardeau who also raises rice in Kennett, Mo. "They're trying to force all regions and all crops into a program that's designed to help one."

Rice farmers, who use irrigation, are more affected by fluctuations in price than they are by natural disasters like droughts or flooding that affect corn, Combs said. Their yields don't fluctuate from year to year the way corn crops can.

The same is true for peanut producers. Peanuts, which haven't been grown in southern Missouri for years, are making a comeback, with more than 30,000 acres planted in Butler County this year and some in Stoddard County as well, said Caleb Davis of Braggadocio, Mo.

A recent study by the Food and Agriculture Policy Institute at the University of Missouri showed that rice and peanut growers, who are the main beneficiaries of direct payments, would lose more than 60 percent of their government support over the next decade under the system proposed in the 2012 farm bill.

As it's written, the bill puts greater emphasis on government-subsidized crop insurance, but rice farmer Lewis Rone of Portageville said his crop insurance costs would be almost as much per acre as what it costs him to lease the ground he farms. His crop insurance rates are also much higher than what farmers in Indiana, Illinois and Iowa pay on their corn, he said.

"We understand we have to do our part to help reduce the federal deficit," he said. "I'm not against cuts, but I'm against being the only cuts."

Gary Murphy of Bernie, Mo., said he's hopeful that language to help rice farmers will be added either by the House of Representatives, which is expected to take up the bill later this summer, or when the House and Senate meet in conference committee.

"What we need is something to kick in if Europe collapses and China quits buying. At these prices, we're doing great, but if something crazy happens, then we need help," said John Moreton of New Madrid, Mo.

Dairy programs

Earlier this week, Emerson met with dairy farmers in western Missouri. The new Dairy Production Market Protection Program in the 2012 farm bill is to protect dairy farmers' margins equal to the difference between milk prices and feed costs. The new Dairy Market Stabilization Program encourages producers who participate to scale down production when the market is oversupplied. They replace the existing Dairy Product Price Support Program and the Milk Income Loss Contract Program.

U.S. Sen. Claire McCaskill also addressed the new dairy programs during a conference call Tuesday with several state agriculture associations.

"We've made some changes into our dairy title that will help dairy programs in Missouri maintain reasonable margins in the face of very, very high costs," McCaskill said. "Both of these are programs will help the volatility that you have in the dairy market, particularly when you have incredibly high input costs."

Currently, dairy farmers are in a time of overproduction, said Larry Purdom, president of the Missouri Dairy Association. While the programs seek to stabilize the dairy market, they won't determine how much shoppers pay for a gallon of milk at the grocery store.

"It's not the farmer, whether it's wheat in the loaf of bread or the milk in the store, that sets the price going up and down," Purdom said.

The 2012 farm bill also includes a $4 billion overall cut to the $80 billion-a-year Supplemental Nutrition Assistance Program, or food stamps, by targeting abuses and cuts $6 billion overall from land conservation programs, now at $10 billion annually.

mmiller@semissourian.com

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Highway T, Portageville, MO


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Actually, the new farm bill proposal, called ARC, is designed to protect against falling prices over multiple years, not "shallow losses". It should work equally well for all crops (with some modifications allowed for cotton). Payments are made (if necessary) on a farms yield and price history compared to the crop insurance region's yield and price history. There is not a way that this forumula can favor one crop over another. Currently, corn receives far less support per acre than most other crops, except soybeans. It is true that rice could lose a greater amount of support, but only because they receive a greater amount per acre. But they will be supported equally as well as corn and soybeans. There are multiple analysis that demonstrate this.

-- Posted by Mike Geske on Sat, Jun 16, 2012, at 11:18 AM


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