SD agriculture weighs in on 2012 Farm Bill process

South Dakotans provided direction for what the next farm bill should look like when the U.S. House Agriculture Committee held a field hearing on the 2012 farm bill in Sioux Falls. Farmer panelists pushed crop insurance, ACRE program reforms and the importance of ethanol markets to the industry.

Rep. Stephanie Herseth Sandlin hosted eleven member colleagues of the House Agriculture Committee, at the hearing held on the campus of Augustana College on May 18. The event, designed to gather input for the 2012 Farm Bill, drew nearly 200 attendees to hear the testimony from two separate panels including a 7-person producer panel representing the state’s agriculture interests.

Gary Duffy, president of the South Dakota Corn Growers Association, was the first to speak at the hearing, immediately kicking off the conversation about the importance of crop insurance and its role in filling in the safety net gaps farm bill policy doesn’t encompass.

 “Crop insurance is the greatest risk management tool producers have. No one knows what Mother Nature is going to do and the risk she brings to our industry,” he said. “Crop insurance is efficient, effective and a program that works for all crops.  It is the most important program for all producers”

Duffy’s support for crop insurance was echoed by other panelists, which included representatives from the South Dakota’s soybean and wheat industries as well as Farm Bureau and Farmers Union. Each panelist emphasized the importance of effective crop insurance protection to farmers’ operations.

“Crop insurance not only helps farmers gain access to private funding to finance raising a crop, we also use it as a marketing tool which allows us to forward market a portion of our crop to capture highs in the market when they occur before the crop is harvested. Federal crop insurance ensures that Americans have access to an affordable food supply,” said Doug Sombke with the South Dakota Farmers Union. “I would urge the committee to keep crop insurance at their current level in the 2012 farm bill.”

Congressman Mike Rogers of Alabama probed producers to find out if they would consider trading direct payments for a more robust crop insurance program.

“Would you be willing to opt out of the direct payment and counter cyclical programs for a favorable crop insurance program?” said Rogers.

Rod Gangwish, who grows corn and soybean near Shelton, Neb., weighed in on the question saying, “It depends on what the protection is. One year of hail could put us out of business. There’s a lot of variance that goes on out there.”

Duffy responded, “I think you could take a look at that in combination with the ACRE program with some tweaks.”

Politicians and panelists spent considerable time analyzing the ACRE program, which panelists described as “complicated.” As the 2012 farm bill is crafted, farmers seized the opportunity to suggest tweaks to the optional revenue-based system.

“One of the things we questioned in the 2008 farm bill is whether or not we should be basing this new program on a county basis,” said Herseth Sandlin. “We know here in South Dakota and other states in our region, we have such varied weather patterns and other circumstances by state, which could be a disincentive for producers to enroll.”

Duffy said a challenge with ACRE is that the landlord has to agree to it and enroll in the program for five years.

“I think one of the stumbling blocks for ACRE participation is the landlords,” said Duffy. “There’s a major educational effort that has to be gone through to do that. It’s complicated enough for farmers to figure out and then to explain it to an 80 year old landlord can be very tough.”

In addition to elevating priorities within the farm bill program, the farmers took the opportunity to emphasize how critical a vibrant biofuels market is to the viability of farm country as well as fiscal responsibility.

“In South Dakota, ethanol is the largest market for our corn. The extension of the Volumetric Ethanol Excise Tax Credit will keep a market for over 330 million bushels of corn in South Dakota and provide over 100,000 jobs in the United States. We need to extend VEETC immediately,” said Duffy. “Overcoming the blend wall is critically needed to create new markets and provide jobs across Rural America.  Simply put, we need access to the market place.”

The message was well received by the Committee and related back to the impact on the farm bill itself. 

“We know how important the energy title was in the last farm bill,” said Herseth Sandlin. “VEETC, the blend wall, may be outside the parameters of the farm bill but we know how important having an additional market in biofuels has been to reducing the amount of payments being made to corn growers and other producers in the commodity title. We’ve had zero payments under the LDP and Counter Cyclical programs for the last 3 years at least for corn producers.”

About 75 percent of the farm bill's funding goes toward food nutrition programs, such as food stamps, but it also supports commodity crops, horticulture, livestock, conservation, trade, agricultural research, farm credit, rural development, energy and forestry.

“In terms of the overall budget, our ag programs represent one half of one percent and that is pretty small particularly when you think that just 100 years ago the average American was spending about 40 percent of their income on food and now it’s about 10 percent,” said Congresswoman Betsy Markey of Colorado. “Which means because of the efficiency of the American farmer the average tax payer has more money in their pocket.”

The House Agriculture Committee will continue to take comments on the farm bill through June 14, 2010. To participate, go to www.agriculture.house.gov.

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