CONTROVERSIAL ISSUES LEFT OUT/IN THE FARM BILL
Jan. 29, 2014
Payment limits included in both versions of the farm bills that passed the U.S. House and Senate have been removed from the conference committee's final agreement that passed Monday.
Iowa Senator Charles Grassley has pushed hard for payment limit provisions and now has no way to put them back in. Grassley told reporters this morning, "These have all be watered down to the point that they will likely have little or no effect."
Traci Bruckner with the Center for Rural Affairs agrees with Grassley that the removal is a great disappointment. She tells Brownfield Ag News, "That provision was written into both bills. It's completely undemocratic to remove that provision from the process and backroom deal making and it's going to continue to favor Large wealthy mega-farmers over small and mid-sized family farmers."
Grassley says the farm bill is written for southern agriculture and will probably have lots of problems with the World Trade Organization (WTO).
The dairy package included in the farm bill that came out of the conference committee on Monday includes the margin insurance program with no production management provision.
Producers will be able to insure their margin for anywhere from $4 per hundred over cost up to $8 per hundred. Producers will be able to select the level of coverage yearly. The $4 coverage will cost nothing more than the $100 annual administration fee while additional coverage will cost more.
Mark Stephenson is Director of Dairy Policy Analysis at the University of Wisconsin-Madison, he says producers will need to do some numbers to determine how much coverage they should take.
"If you are looking ahead right now for the year ahead in 2014, we are expecting very strong margins and almost no need to protect anything so you might just say give me the costless $4 margin." Other years, you may find it would be advantageous to sign-up for higher margins. U.W. Madison is building a decision-support tool to help in the decision.
In the long term, this will be part of an overall risk management strategy that will also encompass hedges, puts and contracts.
The plan should be ready to start-up on October 1st. the MILC program will be available in the interim although as Stephenson states, given milk futures, we will probably not see any MILC payments this year.
Bottom line, Stephenson says, "I think it is going to very hard for dairy producers to ignore this plan."
The farm bill does not include the so-called "King amendment". That was Iowa Congressman Steve King's plan to prevent states like California from imposing their own animal welfare standards on farm goods brought in from other states.
In an interview last week in Des Moines, Brownfield asked King if he will continue to pursue the legislation, either as a stand-alone bill or as part of another bill.
"Let's get this done one step at a time," King said. "(Right now) I've got all my focus on 'let's get this farm bill done'.
"I've said this before-say after an election or after a big project is done-when the dust settles, in the morning I'll wake up and pour a cup of coffee and start thinking about it then."
King accused Senate Ag Committee chair Debbie Stabenow of refusing to negotiate on his amendment as part of the farm bill.