"Insurance Farm Bill" proposals

September 4, 2012

Dear Texas Farmers Union Members:

I hope this letter finds each of you healthy and happy. I am writing to explain my concerns with the “insurance farm bill” proposals. The Senate has approved their version and the House Ag Committee has approved theirs but the leadership has not brought it to the floor for a vote.

I have stated numerous times this past year there wouldn’t be a farm bill until after the election because the cuts would be harsh enough that some congressmen would not be sent back to Washington, D.C.

Both the Senate and the House bills eliminate the direct payments, the counter-cyclical, the ACRE program and any ad hoc disaster assistance for insurable crops. When these programs were needed, no farmer ever had to pay any percentage for this assistance. The marketing assistance loans will continue at loan rates as specified in the 2008 law except for cotton and it will be lowered. Cotton will have its own program called Stacked Income Protection Plan (STAX) and sets a revenue guarantee base on expected county revenue.

The C.B.O. baseline is what was spent on the previous bill and they score the change in the two bills to the previous baseline. Whenever the bill comes out of the conference committee, they usually agree on a number one-halfway between the two bills. The cuts to the commodity subsidies will be down about (minus) 21 billion dollars or about 33 percent. The cuts to conservation programs will be close to (minus) 6.2 billion dollars or 10 percent. There will be an increase in crop insurance subsidies of about (plus) 7.3 percent. The largest title in the farm bill is nutrition at about 762 billion dollars or 79 percent of the 964 billion dollar farm bill. The House bill would cut (minus) 16 billion dollars from this program while the Senate bill calls for (minus) 4 billion dollars in cuts to this program. These dollars have zero (0) effect on our farmers or farm programs and are the responsibility of our Congress. There are eight other titles to the farm bill that are important to rural America but are small in cost when compared to the above titles in the farm bill.

On dairy policy cuts, the Senate and the House bills are about the same with both eliminating the price support program, the MILC program and the export subsidies. These are replaced with an insurance program that makes payments to producers when the price of milk, minus feed costs, falls below $4.00 per hundredweight. Dairy producers can purchase higher limits of coverage if they can afford it.

Last but not least is what I believe is the elephant in the room, “payment limits.” The two bills are very different from current law and each other; therefore, I do not want to guess how it will be written when it comes out of conference committee. It is my opinion after looking at the C.B.O. score that the payment limits will be cut by about 50 percent. I believe that southern crops (cotton, rice and peanuts) will bear a disproportionate share of these cuts because recently the other program crops have received higher prices and less payments. Call your Congressman and tell them you deserve a better farm bill. This will be my message to them as I travel to the Capitol in the next few days.

My prayer is, “may God bless and keep each of you.”

Your Texas Farmers Union President Wes Sims

Texas Farmers Union, P.O. Box 738, Sweetwater, Tx 79556