Written by: Matt Bunk
Agriculture leaders who gathered at Bismarck State College last month to hear Sen. Kent Conrad’s latest plans to kick-start the next farm bill all agreed on one thing: The sooner Congress passes the legislation, the better.
Conrad and three other senators, including Sen. John Hoeven, are working together to promote legislation that would protect the disaster-relief programs that are most important to farmers in the Northern Plains while cutting spending for redundant programs and eliminating direct-payment subsidies.
The goal is to include the legislation in the next farm bill. And then pass it this year before the federal budget situation gets any worse.
“We need a farm bill this year. We can’t wait another year,” said Bart Schott, a farmer from Kulm and the president of the National Corn Growers Association. “Without adequate risk-management programs, this could go downhill pretty fast.”
The pressure to reduce federal spending has delayed congressional action on a new farm bill as the House and Senate grapple over how deeply to cut spending on agriculture subsidies. Proposals have included cutting anywhere from $23 billion to $177 billion from agriculture programs, though none of the legislation has garnered enough support in both chambers for passage.
North Dakota’s congressional leaders said the longer it takes to pass a new farm bill, the bigger the risk of deeper cuts.
“There is always a tendency to kick the can down the road,” Conrad said. “And if anyone thinks we’ll be in a better position next year, they’re dreaming.”
The 2008 Farm Bill, which was scheduled to expire last fall, was given a one-year extension when it became clear Congress had reached an impasse. Despite the extension, some disaster-relief programs that North Dakota’s agriculture and livestock producers rely on were not renewed.
Farmers in North Dakota are concerned that their access to loans and other capital will be in jeopardy without the counter-cyclical protections that were built into the 2008 Farm Bill. And a slowdown in the agriculture industry could have widespread impacts on the state’s economy, which relies heavily on farm-related spending.
Agriculture is the largest economic engine in the state, grossing nearly twice as much revenue than the energy industry, according to the North Dakota Department of Commerce. And the state receives more than $1 billion per year from the farm bill, making it the largest per-capita recipient in the nation.
Conrad, chairman of the Senate Budget Committee, said he plans to introduce legislation that would streamline the disaster-relief programs and create a new “shallow-loss” program to supplement existing crop insurance. He has been working with Sens. Hoeven, John Thune (R-S.D.) and Max Baucus (D-Mont.) to craft the legislation.
Conrad said the first step will be “to button this thing up” and get the four-member group to agree on a cost structure that would protect agriculture producers from heavy losses when disaster strikes or commodity prices fall, while also including enough budget savings to gain the support of the full Senate.
One challenge will be finding a balance within the Senate Agriculture Committee, which includes delegates from Southern states where disaster-relief programs are less important and higher target prices for subsidized commodities such as rice and cotton are a top priority.
Hoeven, who serves along with Conrad on the Senate Agriculture Committee, said combining the priorities of Northern and Southern farmers is always tricky.
“We want to see if we can’t come up with an idea that works with our group and then reach out to others, such as the Southern members of our committee,” Hoeven said. “I think we can get there. It’s something that has to be worked through in every farm bill.”
Conrad and Hoeven agreed that the biggest obstacle will be getting enough support in the House, which last year passed legislation that would have cut agriculture spending by $177 billion, including about $50 billion from commodity and conservation programs.
The House legislation was a non-starter in the Senate, which alternately proposed a $23 billion reduction that died when the Joint Select Committee on Budget Reduction failed to agree on a comprehensive budget package.
“We need to provide some momentum for this as it goes to the House,” Conrad said. “We’re very concerned about the policy the House was advancing. It would be adverse to North Dakota.”
The House proposal, Conrad said, would establish target prices for subsidized commodities that would upset the market balance for North Dakota farmers. Instead of producing crops based on market demand, farmers would have government-based incentives to alter the types of crops they plant and sell.
“The House proposal would lead to planting for the program, not the market,” Conrad said. “And we need to stay focused on a market-based approach, or it will have devastating effects on North Dakota farmers.”
Last month, House Agriculture Committee Chairman Frank Lucas (R-Okla.) came to North Dakota to help Rep. Rick Berg raise money for his bid for the U.S. Senate seat that will be vacated by Conrad at the end of this year. During public events in Fargo and Bismarck, they responded to concerns about the House’s approach to spending reductions for agriculture programs.
Lucas told the Grand Forks Herald that one of the difficulties is that 23 of the 46 members on the House Agriculture Committee have never served on the committee before. He said 40 percent of the members are there because of social nutrition programs included in the farm bill, which account for 75 percent of its spending.
Likewise, Berg told the Great Plains Examiner that it will be difficult to convince his colleagues to sustain funding levels for agricultural programs when so many of the representatives come from urban areas.
“In the House, you have 4 percent of the people coming from ag areas, and 96 percent of the people coming from Detroit, Chicago, Atlanta,” Berg said. “And that’s one of the big challenges that I see when it comes to getting a farm bill through – educating those people.”
Berg said he supports the Senate proposal that called for $23 billion in cuts to the farm bill. And he said it’s one of his priorities to pass new legislation this year that provides adequate funding for crop insurance and counter-cyclical programs that provide additional assistance to farmers when commodity prices fall.
Berg said agriculture producers have acted responsibly by agreeing to limited cuts as the federal deficit looms large. He said he hopes other House members recognize that farmers are willing to absorb spending reductions in some areas, including programs that provide direct payments to farmers and subsidize the production of biofuels.
“The message was sent, that the people who have interest in agriculture are willing to work together and take some reductions in funding because they understand the situation the country is in,” Berg said. “There isn’t really any other group out there that has done what agriculture has done.”
But last April, both Lucas and Berg voted to pass House Budget Committee Chairman Paul Ryan’s 2012 budget proposal, which would have reduced agriculture spending by $177 billion.
Berg said Congress’s most daunting challenge right now is to solve the budget deficit and reduce the national debt.
“Part of this process is doing what you are supposed to do in Congress, and today we’re spending $10 billion a day with $6 billion in income, so we’re short $4 billion a day,” he said. “The House passed a budget. It has passed appropriations bills. The Senate has not passed a budget for 1,000 days.”
Nonetheless, Berg said he expects the Senate to take the lead on the next farm bill.
“Part of my position will be determined by seeing what the Senate passes and what gets sent over to the House,” he said. “But, fundamentally, we need a program that allows people to produce to the market and not get stuck into a government program that says, ‘Here’s what you need to produce.’”
Almost nobody is willing to bet that a farm bill will get passed this year, although Conrad, Hoeven and Berg have vowed to continue trying. And the North Dakota farm community is definitely behind them.
Gary Hokana, who owns a farm near Ellendale, said the flooding last year was a perfect example of why disaster-relief programs must remain strong.
“The main thing you’re trying to do is cover the financial risk and sustain a family farm,” he said. “You need a safety net to keep the younger generation on the farm.”
When Conrad asked the agriculture leaders at BSC for a show of hands if they think it’s important to pass a new farm bill this year, all 32 of them responded without hesitation.
“All you have to do is make a call and you’ll have all of us at your side,” North Dakota Farmers Union Vice President Bob Kuylen told Conrad. “Our people will be ready to get on a plane and walk the halls for you.”
-Matt Bunk is publisher of the Great Plains Examiner.
This entry was posted in Business, ND in DC, NEWS CATEGORIES, Slideshow and tagged agriculture, disaster relief, farm bill, farmers, John Hoeven, Kent Conrad, North Dakota, Rick Berg, subsidies. Bookmark the permalink.
Pingback: Delay on farm bill jeopardizes ND agriculture industry | US Senators