Senate Budget Committee Chairman Kent Conrad, D-N.D., says he thinks budget pressures will lead to a change in federal farm policy
"I think we all saw in the last Farm Bill debate that there is an opportunity to go to income protection programs rather than the structure we have historically had," Conrad said. "There is going to have to be a consolidation and simplification of programs across the board. That can save money and I think also lead to more effective for American agricultural producers."
Conrad, who has decided not to seek re-election in 2012, was a member of the bi-partisan Federal Debt Commission that floated the idea of tying future direct payments to grain, soybean and cotton growers to production costs as a way to reduce safety net spending. Conrad thinks the idea has merit, but American Farm Bureau Chief Economist Bob Young has a different opionion.
"The first question you're going to ask yourself is whose cost of production, and are we going to talk about variable costs, are we going to talk fixed costs, are we going to talk about what's in that package," Young said. "You look at the variability or the variance in cost of production across the country, and even within a state, within a county for that matter; it'll vary by as much as $3 to $4 a bushel. So whose cost are we going to cover? It is a very slippery slope if you start moving down that road."
Young says coupling direct payments to production costs also would violate world trade rules.