Farm Bill battle begins
September 10, 2008
WASHINGTON (DTN) – The battle over implementation of the 2008 farm bill began in earnest Monday, and it’s members of Congress and farm groups vs. the Bush administration.
Deputy Agriculture Secretary Chuck Conner told the National Farmers Union the Agriculture Department would implement the new Average Crop Revenue Election program, or ACRE, for the 2009 crop season, but Bush administration officials have not decided whether to use the 2006-2007 crop prices or the 2007-2008 crop prices to establish target prices under the program.
Members of Congress and farm leaders including NFU’s Tom Buis contend that Congress clearly intended the new program be based on the high prices in 2007 and 2008, but USDA officials have said the law gives them the discretion to use the 2006 and 2007 crop prices, which were lower, and would make the program cheaper to operate.
After a speech to the NFU membership fly-in on the implementation of the 2008 farm bill, Conner told reporters there will be a “timely announcement” about the new program, but details of the program would not be available before the fall crops are planted. USDA officials have said that the Farm Service Agency, which delivers farm benefits, needs new computer equipment to handle the program, but Conner told reporters the agency will implement ACRE even if Congress does not provide more money for computers.
The ACRE program provides payments to producers if the revenue for a crop within a state is less than the state’s crop revenue guarantee and their individual farms experience a crop revenue loss during the same crop year. The farm bill requires that the ACRE program begin in 2009 and the price guarantees for the covered commodities and peanuts be based on “the most recent two crop years.” While congressional and farm group leaders contend that means the 2007 and 2008 crop years, some USDA officials have said they want to use 2006 and 2007 because they do not have all the data for 2007 and 2008 to declare the price guarantee.
Last Thursday, 11 major farm groups wrote Agriculture Secretary Ed Schafer that they are “extremely concerned” USDA may interpret the statutory language “in a manner that would seriously undermine the viability of this critically important safety net option.” The signers included National Farmers Union, the American Farm Bureau Federation, the American Farmland Trust and wheat, barley, corn, sorghum, sunflower, and dry pea and lentil commodity groups.
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“The underlying purpose of the ACRE program is to provide an optional farm safety net that is more contemporaneous with actual market conditions,” the groups wrote. “By moving the ACRE guarantee price to 2006, the department will make market signals more remote from actual planting decisions and significantly diminish the program’s effectiveness at a time of steep increases in production costs. This distortion in the program’s mechanism for establishing state revenue guarantee levels would, in effect, seriously undermine a key reform in the 2008 farm bill and future efforts to develop innovative reforms to the commodity title.”
Conner said the Bush administration has not made a decision on which set of crop years to use. He said he was not certain whether the announcement would be made by Sept. 26, the date Congress is scheduled to recess for the elections, but he said the next three weeks are “a critical time period for farm bill implementation.” Most farm bill programs are supposed to go into effect on Oct. 1, the beginning of the FY09 fiscal year, but commodity programs go into effect on dates by which farmers must plant crops in order to qualify for federal crop insurance.
NFU’s Buis said USDA’s interest in using the 2006 and 2007 prices, which were lower than 2007 and 2008, is an indication the Bush administration is attempting to implement the farm bill as “cheaply” as possible.
jerry hagstrom can be reached at email@example.com