With the current Farm Bill set to expire in September, more groups are wanting input on a new package, experts said Wednesday.
Troy Dumler, extension agricultural economist from Kansas State University; Sam Funk, agricultural policy specialist from the Department of Agricultural Economics at Kansas State University; and Brad Lubben, extension policy specialist of the Department of Agricultural Economics from the University of Nebraska-Lincoln, discussed the 2007 Farm Bill proposals with a group of people at the American Legion Post No. 5.
The event was part of three presentations across the state sponsored by K-State Extension.
Lubben spoke about the drivers of the 2007 Farm Bill debate. He said the farm economy is good right now.
“We have had the four greatest net income farming years nationally,” Lubben said.
Lubben said the budget also is different than it was during the last Farm Bill debates in 2001. In 2001, the debate was about how to allocate an additional $70 billion out of a federal surplus. In 2007, that story is different. There is a $248 billion deficit and possible spending cuts could be on the way to reduce this deficit.
The political climate is different this time around too, Lubben added.
“Nothing ranks as high as politics in importance,” he said. “The political climate has changed with a Democratic Congress from a Republican Congress.”
A group called the Environmental Working Group (EWG) has changed the debate, Lubben said. The group is fighting for more money toward conservation and is asking why so much money is being spent on farm commodities.
The current Farm Bill expires in September of this year, which will take farmers through this year’s crop, Lubben said. He said this time, there are more players at the table. Conservation groups want more money; food safety and Homeland Security are new to the game; nutrition and food assistance programs are key to the Farm Bill Coalition; and rural development and energy organizations are looking for funding.
Dumler spoke to the group about historical rationale for farm programs. He said the main reasons for farm programs are to save the family farms, support rural communities, provide cheap food supply, maintain the environment and compete with subsidizing countries and large agribusiness.
Under the save the family farms section, Dumler said 93 percent of commodity payments go to five products: wheat, rice, corn, soybeans; and upland cotton.
“Ten percent of farms receive 70 percent of subsidies payments,” he said. “The commercial farmers are basically the farmers who produce the most commodity stuff and therefore get the most payment.”
The final topics of the day centered around three proposed alternatives for the Farm Bill. The first alternative discussed was maintaining the status quo with some adjustments. Lubben discussed a three-part safety net program as part of the status quo. The three-part safety net starts with the marketing assistance loan program, which provides income support based on the national average loan rates. Direct payment is the second part of the safety net and guarantees a fixed payment to producers based on the producer’s base acreage and program yield history. Counter-cyclical payments are the third part of the safety net established in the 2002 Farm Bill. They provide a payment based on the difference between the target price and the effective price of the commodity.
Lubben also discussed about the five part safety net, which includes the previous three plus payments for insurance and disaster assistance.
Dumler talked about the second option. He talked about three revenue-based proposals by the USDA, the National Corn Growers Association and the American Farmland Trust. Each has proposed programs designed to achieve the same goal, but use different means to do so. Two of the proposals (USDA and AFT) trigger payments when national revenue falls below the target level. The other proposal by the NCGA triggers payments when county and individual farm revenue falls below the target level.
Funk touched upon energy components and the idea of restructuring agriculture with biofuels. He said the 2007 Farm bill may be a legislative landmark for the future of biofuels and alternative energy in the U.S.
Funk said the demand for grain-based ethanol is having an effect on farmers in the form of feed prices.
“Biofuels is both a blessing and a curse for agriculture,” Funk said. “If they have the extra grain to sell, they are feeling pretty good.”