In a letter to lawmakers Thursday, the American Soybean Association (ASA), National Corn Growers Association (NCGA), National Sunflower Association and the U.S. Canola Association urged the House of Representatives to quickly consider and pass H.R. 1947, the Federal Agriculture Reform and Risk Management ("FARRM) Act.
"Our organizations support many of the programs included in H.R. 1947, as reported by the Committee on Agriculture. The bill would consolidate conservation programs, reauthorize and fund agricultural research, energy, and export promotion programs, and make improvements in federal crop insurance. We strongly support these provisions, and ask that you oppose any amendments which would eliminate or weaken them, said the groups in the letter.
"We are very encouraged by the momentum that the farm bill has going into the House, and we urge Representatives to act quickly to provide farmers with the certainty we need moving forward, said ASA President Danny Murphy, a soybean grower from Canton, Miss. "We are convinced that lawmakers can work together to pass a bill that both supports agriculture and confronts our budgetary obligations responsibly.
"We were pleased to see the 2013 farm bill pass with such strong support in the Senate last week and urge the House to swiftly follow suit," NCGA President Pam Johnson, a corn farmer from Floyd, Iowa said. "Passing a comprehensive, market oriented farm bill is critically important to not only agriculture but to every American. We encourage the House to adopt policy that will be both responsive to taxpayers and effective in helping farms remain viable and productive."
The groups noted, however, their concern with the bill's Price Loss Coverage (PLC) program option, which they argued would set high, fixed reference prices for program crops which, in some cases, exceed their historical prices and cost of production; and tie payments to producers to crops they grow in the current year, which could distort planting decisions and production if market prices fall below their support levels.
"Since the 1996 Farm Bill … farm policy has provided planting flexibility, encouraging producers to respond to market signals in making their planting decisions rather than to the prospect of receiving government payments, wrote the groups. "We do not want to see policies return to the era of high supports tied to current-year plantings, which distorted crop production in the 1980's. The PLC program in the Committee bill should be modified to make it responsive to the market rather than the government.
The groups spoke to a potential amendment from Rep. Bob Gibbs (R-Ohio) that would address their concerns by setting reference prices at a percentage of recent average market prices, which do not exceed production costs. The Gibbs amendment would also provide for payments on historical crop acreage bases rather than on current-year plantings. "These changes would make the PLC program more market-oriented and significantly reduce the risk of distorting planting decisions and production, argued the groups. "They would also reduce the likelihood of the program violating U.S. commitments under the WTO. Moreover, they would achieve an estimated $10 billion in savings in addition to the Committee bill.
A full transcript of the letter is available by clicking here.