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February 16, 2001

Discussion spirited in
FARM BILL DEBATE

By Lana Robinson
Field Editor

Low commodity prices, high fuel prices, the lack of a "safety net," trade disparities, and program abuses were on the minds of producers sitting in on a Farm Bill Committee Study meeting at the Texas Farm Bureau Leadership Conference in Austin late last month. The committee, whose work has focused on putting together recommendations for the next farm bill, is made up of the following board members: Lloyd Arthur, Ralls; Ralph Detten, Hereford; Bob Reed, Bay City; James Maxton, Omaha; Dan Dierschke, Austin; Kenneth Dierschke, San Angelo; and TFB President Donald Patman of Waxahachie.

President Patman opened the meeting up by challenging those present to consider, "What would we want to keep in the new farm bill? What would we want if we could write it ourself?"

Glen Jones, director of TFB's Research, Education and Policy Development division, apprised leaders of important areas and changes in the national farm policy set by American Farm Bureau Federation delegates in Orlando, Fla. last month. Jones indicated that planting flexibility was retained. He said a suggested change in the LDPs (loan deficiency payments) to make all producers of program crops eligible for payment, regardless of whether or not the farmer has an AMTA (Agricultural Marketing Transition Act) contract, was included.

"We still need a countercyclical income assistance safety net, and we need to review farm yield and base acres and bring that up to date," said Jones. "We've had a change on our position on loan rates. We're for increasing loan rates. We're proposing that rates be adjusted to be in historical alignment with the current soybean loan rate. Last year, we voted against it. This year, realigning was added. LDPs were added. We're for locking in the LDP on a published price after planting, based on a 3 or 5 year average. When crop insurance policies are in effect on commodities, LDPs should be paid on actual production or on established yield, whichever is greater. And we favor providing for a payment in lieu of an LDP for producers who choose to graze out wheat."

Jones also noted that the organization's farm bill policy would require the Farm Service Agency (FSA) to constantly review the formula used to set posted county prices (PCPs) to ensure they accurately reflect market conditions at the county level and that the differential between the cash price and PCP does not penalize producers or county elevators.

As the discussion progressed, District 8 Director Dan Dierschke warned producers that all kinds of radical environmental and wildlife groups were preparing to write a "green" farm bill.

"If we're not clear about what we want, there are other people who will be clear about what they want. We need a unified program, a coherent program," said Dierschke.

Robert Cervenka, who farms and runs cattle near Waco, told committee members he felt changes in the EQIP (Environmental Quality Incentives Program) were needed.

"The program helps bigger operators. It favors larger producers. It's also very complex and frustrating. The FSA and NRCS (Natural Resource Conservation Service) do not speak the same language," he said.

Vince Cortese, who runs cows along the Leon River, called for "equity in trade," "import quotas," and "enforcement of existing trade rules." Most of all, he said stronger negotiators, who looked out for the interests of agriculture, needed to be sitting at the table when trade agreements were written.

District 2 Director Lloyd Arthur said, "One proposal considered by the Farm Bill Study Committee is that the farm program be loaded for young farmers. As they age, it would be phased out for them. What would you think about that?"

No one seemed opposed.

"We need to get them in for us to stay," one county leader pointed out.

One crop producer suggested that the loan rate be increased by at least 20 percent. Another said, "Maybe we need to think about getting in bed with the treehuggers, to get some kind of supplemental income for meeting a `green' standard. We certainly need to be considering areas of non-traditional agriculture if we are wanting high profitability."

Noting that the current percent of parity was 40 percent, one farmer suggested, "We need to be closer to a level of parity that will ensure us some kind of profit at the level of production we're going to need. We need production levels or quotas to reduce the surplus."

"If we're going to continue down this road of high production and surpluses, then let's shoot for the moon. Let's ask for the cost of production plus a profit plus a COLA (Cost of Living Allowance). If we're not, OPEC showed us what can be done," another producer said, alluding to the prospect of a possible foreign food cartel if the U.S. becomes dependent on imported foods.

"Sixty-two percent of our food and fiber is imported now," said another. "In three years, our agricultural imports will exceed our exports...When we spend dollars here, we rotate that dollar. With imports, we lose taxing benefits. We need stricter monetary and trade policies."

Arthur asked participants if they favored volunteer or mandatory set-aside programs. The consensus seemed to be that curtailed production in the U.S. would simply be made up somewhere else and U.S. markets could be lost.

Again, one county leader insisted, "We need our trade negotiations to be tougher. That's the only thing that will make any appreciable difference. We're over-producing what our markets are. We've got control with tough agreements."

Others lamented over landlord-tenant problems created by the fact that the AMTA payment is not tied to production. Several testified that this caused them problems.

"We need to eliminate those who are farming for insurance only," another leader told committee members. "I'll probably get a third of what he's getting for planting, and he's collecting insurance."

Tom Henderson of Clay County called on all producers to be careful not to abuse the insurance program or other aspects of the system. He also expressed concern that the consolidation of FSA and SCS offices in some parts of the state would create a hardship on producers.

Past District 3 Director L.C. Harrison underscored the importance of sound farm policy, pointing out the current bleak state of agriculture.

"I don't know if you've paid attention, but the cattle futures are really down because of `mad cow.' We have high diesel and high fertilizer costs. Add it up all in one year, we're going to have to have a bumper crop to break even," he said.