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Safety net needed for ag

What is U.S. Secretary of Agriculture Tom Vilsack’s outlook for the new farm bill making its way through Congress? Will new legislation be passed and signed into law before the current bill expires Sept. 30? He’s hopeful that deadline will be met.

“We need the new legislation,” Vilsack told a gathering in Des Moines recently. Farmers need assurance there will be a farm program, and need time to understand it and figure out how it fits into their farming operation for next year. Also, we no longer have a disaster program. The SURE program expired Sept. 30, 2011. If there’s a drought, flood, fire or tornado, what would farmers do? They wouldn’t have help from the current farm program.

Farmers in various areas experienced such calamities last year, as 55 million acres were impacted. Crop insurance is available, but that’s it. No livestock forage program, no livestock indemnity program, no crop disaster program to help cover what crop insurance doesn’t. It’s important to pass new farm legislation by September.

Another reason to do it now is it’s not going to be fiscally easier to pass it next year. Lawmakers will face more pressure to cut federal spending in 2013. Vilsack praised the Senate Ag Committee, Democrats and Republicans, for working together to get a bill through committee. It still must be passed by the full Senate and sent to the House where pressure will be on those lawmakers to get it done.

“I think we’ll end up with a bill that makes a continued commitment to providing a safety net, and crop insurance will be at the center of it,” says Vilsack. “We’ll see an effort to try to complement and supplement crop insurance with some sort of revenue protection. It won’t be like direct payments; it won’t be a program subject to as much criticism as the current farm program has received. It should be a program people can more easily understand what we’re doing and why we’re doing it.”

Vilsack says direct payments to farmers to grow corn and soybeans are going away. What kind of reaction has he gotten? “Farmers realize the fiscal reality. The way the farm program provides a financial safety net will change,” he says. “Direct payments have been subject to criticism and concern by many different people. Those concerns, plus the fact that we have to reduce the overall investment in the farm program, will likely make direct payments one of the casualties.”

Even without direct payments, you’ll likely see a Food, Farm and Jobs Bill that creates a strong safety net with two components, he says. One is a solid crop insurance program. The other is something that overlays crop insurance, providing revenue protection when and if prices precipitously drop or a natural disaster wipes out your crop or reduces it substantially.

A different farm program

“We’ll have a farm program, but it’ll be different,” says Vilsack, “and less expensive than the previous program. It’s important to note combining the financial safety net with soil conservation, research, trade and incentives for local and regional food systems, and the bioeconomy development creates new opportunities to generate farm income. That will help maintain commodity prices and farm income.”

One of Vilsack’s jobs this year is reminding people how well the farm economy is doing. The U.S. has record farm income, record exports and one out of 12 jobs is connected to agriculture. Ag has been helping get this country back on track, and it’s basically provided a road map for economic recovery, he says. The Midwest has seen a 14% increase in manufacturing this year, which he credits to strong farm income along with an uptick in the automobile industry.

This article published in the May, 2012 edition of WALLACES FARMER.

All rights reserved. Copyright Farm Progress Cos. 2012.