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Trade, federal budget and economy to drive farm bill
Farm World Editor

FORT WAYNE, Ind. — Warned by USDA officials that the next federal farm bill will likely be smaller than the current 2002 version, farm groups have started the process of prioritizing.

The Indiana soybean growers, corn growers and Farm Bureau joined efforts last week for a farm bill policy discussion during the Fort Wayne Farm Show. Not surprisingly, the federal budget and trade issues topped the discourse.

“The 800-pound gorillas are the federal budget and whatever may happen with that and world trade,” said Kent Yeager, who leads Indiana Farm Bureau’s Government Relations division.

“Here’s what I hear a lot, ‘It would be great if we could keep the ’02 program with just a few tweaks,” he said.

Serving as one of the moderators for the talk was Chris Novak, the leading executive for Indiana’s corn and soybean commodity programs.

“The top three drivers for the farm bill will be the farm economy, the farm economy and the farm economy,” Novak said.

“The 2002 farm bill was written over the course of 2000, 2001 and 2002. Do you all remember where prices were around that time? I seem to remember; at least, there were a few weeks where beans were below $4 a bushel. The farm bill was written under those circumstances.”

Where prices are when the bill is being crafted, Novak indicated, will likely direct how government payments will be structured.

“Other key drivers include the (federal) budget, world trade and politics,” he said.

Novak said the United States lost a World Trade Organization lawsuit brought by Brazil regarding the U.S. cotton program. He said that ruling will have an impact on all other U.S. commodity programs and trade issues. Exactly what will happen, Novak did not speculate. He also said if Democrats reclaim control of the U.S. Senate after the 2006 mid-term election, then that could cause significant changes in priorities for the farm bill. In that case, Novak said, Sen. Tom Harkin (D-Iowa) would replace Sen. Saxby Chambliss (R-Ga.) as the ag committee chairman.

“That would be a radical change,” said Novak, who said he was a former aide to Iowa Republican Sen. Chuck Grassley.

Growers’ opinions
Lynn Teel, president of the Indiana Soybean Growers Assoc., said farmers need to think now about what they want in the future.

“As we look forward to the new farm bill, we’re really going to need some input,” Teel said. “It’s likely going to change.”

Energy, conservation and risk management issues topped the list among the growers attending the session.

“The energy program is important,” said farmer R.D. Wolheter. “Anything we can do to encourage renewable fuels would be a good thing to do.”

Grower Jerry Perkins added, “Perhaps that should be the focal point of the new farm bill discussions.”

Other farmers said ethanol and soybean-based biodiesel enjoy a positive environmental reputation on more than one front.

“I guess I’d rather see my corn go to that instead of going to North Carolina to feed the chickens,” said corn-producer Ellis McFadden regarding the number of new ethanol facilities being constructed in Indiana.

Frustration with the lack of access to the Conservation Security Program (CSP) irritated other growers.

“CSP was a very under-funded program from the very start,” Yeager said. “But we thought, ‘You know, it is enough to get started with it.’ Every year we go back and work for additional funding. I think every year, CSP is a program that has been raided.”

“The CSP program - if you opened it up to everyone, we’re talking about astronomical dollars.”

Wolheter added, “We hope in another year or two that our watershed is included in the program.”

Government payments
Novak said most farmers are not in favor of smaller government payments.

Paul Bishop described himself as a southern Indiana farmer who uses no-till practices on his 1,500 acres.

“I think we ought to keep the limits where they are,” he said. “They certainly shouldn’t go down.”

Yeager added that public opinion about those payments are crucial. He said many believe that large farms are getting large payments - costing taxpayer money.

“The public perception is of critical importance,” he said. Perkins replied, “You’ve got 2 percent of the voting population trying to convince the other 98 percent of the voting population that what we receive (in government payments are) really worth it to them. “What the public thinks has an enormous effect on what we want to do and what we’d like to accomplish.”

McFadden added, “This is what Congress wants - they want their constituents to have cheap food, and that’s what these payments accomplish.”

Soybean producer Roger Hadley said the FSA offices should keep a record of proven and updated yield data for the accurate calculation of payments.

Risk management
Preparing for inevitable weather disasters or other yield-damaging issues is another task for federal lawmakers.

“Risk management is something that is relatively popular,” Yeager said. “How much and what kind of a safety net is the government going to provide? What is it going to take to make it work like it should work?”

Hadley said lawmakers wanting to appeal to their constituents reduce the effectiveness of government programs.

“One thing the government has screwed up, in my opinion, is that they say if you don’t have crop insurance, you’re not going to get disaster assistance,” he said. “Then, when there is a disaster, they turn right around and give you the assistance.”

Hadley explained that crop insurance would be a good tool if it were used as it is intended. “We do have to create a system where the money is getting where it is needed,” he added.

Yeager said with the variety of farm-related disease issues on the horizon, for both livestock and crops, funds for research are important.

“Typically, when we seem to need the money the most, we face budget cuts,” he said.

Published in the January 25, 2006 issue of Farm World.