The U.S. House Agriculture Committee is hosting a two-day subcommittee hearing that concludes today (Thursday), accepting testimony on commodity programs and crop insurance detailed in the proposed measure.
The current version of the five-year bill, which would replace the current farm act set to expire Sept. 30, shifts the agricultural safety net to crop insurance, consolidates conservation programs and takes aim at abuses in the federal food stamp program.
The biggest change under the bill would be the end of direct payments, which aren’t tied to a farmer planting a crop and cost about $5 billion a year, replacing them with a “shallow loss” program that pays farmers when decreasing yields or declining prices result in a farmer’s revenue falling below historic averages.
For more serious losses, farmers would rely on crop insurance. Growers select and pay for crop insurance based on crops they grow, using a history to estimate future value. Premiums and payments vary based on the deductible and level of coverage.
Lee Craig of the Park County office of the USDA’s Farm Service Agency said Congress is highly motivated to finish the Farm Bill by the end of September or extend the current Farm Bill, completed in 2007. The Farm Bill is updated every five years.
The Farm Bill traces its roots to the Depression era, but it has evolved into a complex net of payments and support programs.
From the 1970s through the mid-1990s, Craig said, farm programs included a diversion payment option, where farmers received cash payments to leave a portion of their ground idle. In the Big Horn Basin, he said, that usually meant barley ground. Sugar payments are “a little different process” and come through company contracts.
Programs in the Farm Bill are designed to aid farmers, not to give them a foolproof way to make a living, Craig said. He said he believes the new Farm Bill will include programs that allow farmers to borrow against the estimated value of their crop while waiting for more favorable market conditions.
Congress hopes to trim Farm Bill spending to cut the federal deficit by $23 billion, with $4 billion coming from the Supplemental Nutrition Assistance Program, or food stamps. That’s accomplished by ending misuse by college students and cracking down on retailers and recipients trafficking in benefits. Food stamps, received by more than 46 million Americans, take up about 80 percent of the spending in the bill.
The Farm Bill could face an arduous road to approval. The Senate Democratic leadership has to fit the bill into a crowded schedule, and the measure faces considerable resistance in the House, where the Republican majority is pressing for more extensive cuts to food stamps. Southern senators, meanwhile, say the shift from direct payments to a system based on crop insurance and a new federal risk management program discriminates against Southern crops, particularly rice and peanuts.
(The Associated Press contributed to this story.)