Farm and advocacy groups are hard at work this holiday week doing some heavy reading - the House version of the 2012 Farm Bill. Wading into the deep waters on this bill offers a look at the programs being offered. In announcing the bill, House Ag Committee Chair Frank Lucas, R-Okla., reports the bill is reform-minded and fiscally responsible policy. And Ranking Member Collin Peterson, D-Minn., is happy his Dairy Security Act is part of the bill.
Groups are poring over the bill looking for differences and similarities to the Senate version, which passed two weeks ago. The key savings offered in the House version - $35 billion in mandatory funding - is significantly higher than the Senate version. Perhaps the most contentious savings is the $16 billion in the Supplemental Nutrition Assistance Program, which is well above the Senate's $4.5 billion cut.
The House does end direct payments, countercyclical payments, the Average Crop Revenue Election program and the Supplemental Revenue Assistance Payments. These are replaced with new reforms.
The House is offering a choice in risk management tools.
Price Loss Coverage addresses deep, multi-year declines, a risk that Southern farmers say isn't covered by the Senate's Agriculture Risk Coverage program. PLC would complement crop insurance, which is a single-year payout program in case of disaster. PLC uses modern yields and an index of blow cost of production prices to establish a market-oriented, price-based risk management tool for producers, the Committee says.
This provision is similar to an amendment offered by Sen. Saxby Chambliss, R-Ga., during deliberation of the Senate farm bill that would provide a base payout in case of a significant disaster over more than one year. It sets a reference price for key crops based on production costs and would provide payment based on a number of factors. For example, the reference price for wheat is $5.50 per bushel, for corn it is $3.70 per bushel, for soybeans $8.40, for peanuts $535 per ton. Essentially the aim is to provide enough coverage to keep a farm in business until times improve.