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Senate Ag Committee Passes New Farm Bill


The Senate Ag Committee passed their version of a new Farm Bill on Thursday. The bill eliminates direct payments to farmers and strengthens the crop insurance program. After intense negotiations, the committee adopted a shallow loss approach to the government safety net program. The mark-up was postponed from Wednesday to allow a last minute compromise of the commodity title to be hammered out. In his opening statement, Indiana Senator Richard Lugar complained the process was being rushed, “I share concerns that Members of this Committee have not been given appropriate opportunity to review the new manager’s amendment.”  Tom Zacharias, president, National Crop Insurance, said, “We look forward to working closely with lawmakers to make sure the 2012 Farm Bill provides a strong safety net for the men and women who produce the world’s best food, feed, natural fiber, and fuel supply services” and added he was pleased that crop insurance survived in the new legislation.


Bob Stallman, President of the American Farm Bureau Federation, is not a big fan of the shallow loss approach,” We really believe that actually creates an environment where producers will be paid on a much more frequent basis, but more risk would be taken from producers than what we really think should be the case in terms of a government program.” Stallman is disappointed that a deep loss approach to risk management was abandoned by the committee, “It does not include a catastrophic revenue loss program.  What this does is protect producers from those catastrophic losses whether they’re caused by Mother Nature or by very tremendous price drops that would cause a producer to have their farm at risk.”


Southern Senators on the committee objected strongly to the commodity title saying the bill did not treat crops like cotton, rice, and peanuts fairly. Southern interests vowed to bring this issue up again when the Bill is debated on the Senate floor.


The Bill also consolidates 23 conservation programs into just 13 programs. Stallman praised this streamlining of conservation programs, “We have said all along there are frankly too many different conservation programs, so we have supported consolidation of programs to more easily deal with signing up for these programs.”


According to the National Milk Producers Federation (NMPF), the  legislation includes a new, voluntary margin protection program, endorsed by NMPF, to better safeguard farmers against disastrously low margins, such as those generated by the low milk prices and high feed costs that cost dairy farmers $20 billion in net worth between 2007 and 2009. “The Senate has taken a huge step in the right direction by including the dairy reforms modeled after NMPF’s Foundation for the Future program,” said Jerry Kozak, President and CEO of NMPF.  Kozak said the dairy title contains a better safety net for farmers in the form of the Dairy Production Margin Protection Program, which offers them a basic level of coverage against low margins, as well as a supplemental insurance plan offering higher levels of protection jointly funded by government and farmers. Those who opt to enroll in the margin program will also be subject to the Market Stabilization program that asks them to reduce milk output when margins are poor.


The 900 page bill saves taxpayers 23 billion dollars.  Stallman feels the bill will get good support from urban lawmakers when it goes before the full Senate, “I think the general public should be very pleased by this because this will reduce government administrative costs. It will encourage more conservation activities which is a positive for the environment. So the general public, even though many are not aware that these types of programs are in the Farm Bill, should be very pleased with these changes.”


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Senate Farm Bill Overview


The Agriculture Reform, Food and Jobs Act of 2012 reforms farm policy, consolidates and streamlines programs, and will reduce the deficit by $23 billion. This bill saves taxpayers money while strengthening initiatives that help farmers, ranchers and small business owners create American jobs. The bill:


Eliminates Direct Payments while Strengthening Risk Management

Farmers face unique risks unlike other businesses. Weather and market conditions outside a producer’s control can have devastating effects. A risk management system that helps producers stay in business through a few bad seasons ensures that Americans always have access to a safe and plentiful food supply. The proposal:

  • Eliminates direct payments. Farmers will no longer be paid for crops they are not growing, will not be paid for acres that are not actually planted, and will not receive support absent a drop in price or yields.
  • Consolidates two remaining farm programs into one, and will give farmers the ability to tailor risk management coverage—meaning better protection against real risks beyond a farmer’s control.
  • Strengthens crop insurance and expands access so farmers are not wiped out by a few days of bad weather.


Consolidates and Streamlines Programs

By eliminating duplicative programs, funds are concentrated in the areas in which they will have the greatest impact, making them work better for producers.

  • By ending duplication and consolidating programs, the bill eliminates dozens of programs under the Agriculture Committee’s jurisdiction.
    • For example, the bill consolidates 23 existing conservation programs into 13 programs, while maintaining the existing tools farmers and landowners need to protect and conserve land, water and wildlife.


Improves Program Integrity and Accountability

At a time when many out-of-work Americans are in need for the first time in their lives, it is critical that every taxpayer dollar be spent responsibly and serves those truly struggling. By closing loopholes, tightening standards, and requiring greater transparency, the proposal increases efficiency and improves effectiveness.


  • Increases accountability in the Supplemental Nutrition Assistance Program (SNAP) by:
    • Stopping lottery winners from continuing to receive assistance.
    • Ending misuse by college students.
    • Cracking down on retailers and recipients engaged in benefit trafficking.
    • Increasing requirements to prevent liquor and tobacco stores from becoming retailers.
    • Eliminating gaps in standards that result in overpayment of benefits.
    • The proposal maintains benefits for families in need.


Grows America’s Agricultural Economy

The proposal increases efficiency and accountability, saving tens of billions of dollars overall, while strengthening agricultural jobs initiatives by:

  • Expanding export opportunities and helping farmers develop new markets for their goods.
  • Investing in research to help commercialize new agricultural innovations.
  • Growing bio-based manufacturing (businesses producing goods in America from raw agricultural products grown in America) by allowing bio-manufacturers to participate in existing U.S. Department of Agriculture loan programs, expanding the BioPreferred labeling initiative, and strengthening a procurement preference so the U.S. government will select bio-based products when purchasing needed goods.
  • Spurring advancements in bio-energy production, supporting advanced biomass energy production such as cellulosic ethanol and pellets from woody biomass for power.
  • Helping family farmers sell locally by increasing support for farmers’ markets and spurring the creation of food hubs to connect farmers to schools and other community-based consumers.
  • Extending rural development initiatives to help rural communities upgrade infrastructure and create an environment for small businesses to grow.