The House Agriculture Committee held another hearing regarding the 2012 Farm Bill Thursday. This time Committee members heard from economists and academics who study U.S. agriculture policy. Chairman Collin Peterson, D-Minn., said he wanted the Committee to hear about the trends and emerging issues facing agriculture and rural America: things they'll need to keep in mind when writing the next farm bill. He says their perspectives along with input from farmers, ranchers and others around the country will help the Committee craft policies that address the evolving situation facing producers and others who use farm bill programs.
Ag experts from key universities told the House Ag Committee that conventional farm bill policies need restructuring in the 2012 Farm Bill, especially with the ongoing budget and economic crisis.
Iowa State University's Bruce Babcock told ag lawmakers the current mix of crop insurance, direct payments and other supports is not cost effective.
"Crop insurance I think fails the cost effectiveness test," Babcock said. "Because it simply makes no sense for taxpayers to spend $13 billion to deliver $6 billion in net payments to farmers."
Babcock also said that while direct payments have minimal delivery costs, they are difficult to defend when farmers are profitable. Babcock also says the new ACRE program duplicates coverage available from crop insurance and SURE disaster payments can duplicate direct payments.
Drake University's Neil Hamilton meantime disagreed with Representative Jerry Moran, R-Kan., that the next farm bill should continue to focus on the farmer versus rural development as the engine of rural prosperity.
"I think that there has to be more to it, and the census numbers would show that agriculture receives a significant amount of its income from non-farm employment and off farm jobs," Hamilton said. "It's been that way forever and is increasing so, so I don't necessarily see them as two separate things I think they are actually woven together."
But Moran and former Ag Chair Bob Goodlatte, R-Va., criticized the Obama Administration's emphasis on rural development versus production agriculture. Moran insisted a farm bill must be structurally sound on behalf of farmers.