While Congress continues to debate what should go into the new federal farm bill now being written in Washington D.C., the verdict is already in from the Iowa Corn Growers Association and corn grower organizations from five other states. They recently put out a joint press release calling for the passage of farm legislation that has an optional "revenue-based" safety net.
A farm bill without this feature is little better than no bill at all, says Tim Recker, president of the Iowa Corn Growers and a farmer from Arlington in northeast Iowa. The business of agriculture today is completely different than even a few years ago, so ag policy legislation should lead the way and make this a positive transition. Much of the farm bill as currently drafted puts window dressing on an outdated approach that serves neither corn growers nor the public well.
The effort to merge old and new ideas has led to a startling gap in both the House and Senate farm bill proposals, according to state corn leaders. They say the disaster part of the proposed bill that is being offered to fill this gap is insufficient and risky and seems to show little regard for the corn industry, as a key economic driver for the nation.
What they want in 'revenue-based' bill
According to the position paper released by ICGA and the corn grower groups from the five other states, the new revenue-based option they want to see included in the new farm bill should have the following key elements:
- It should be based on market price, not target price
- No double-dipping. Using the revenue-based option should be exclusive of other programs or program approaches such as non-recourse marketing loans
- To get a viable revenue-based safety net, there should be a willingness to negotiate direct payments
- It should be targeted and designed to activate based on need
- The revenue-based program should not be based on a national trigger but rather a state or county trigger
"The goal of the new farm bill should be to assure a safety net for farmers and consumers who rely on the growing array of food, feed, fuel and fiber products made from corn," says Recker. "A farm bill without a revenue-based program is extremely inadequate and could present significant economic consequences to corn producers throughout the Corn Belt."
Focus should be on revenue, not prices
Over the past two years, state corn grower organizations conducted extensive focus groups and grower surveys at the beginning of the debate on the new 2007 Farm Bill. They found that growers clearly believe federal farm programs should be designed to support the vital agricultural industry when income is low rather than when prices are low. Growers said the current farm bill's focus on low prices rather than revenue should be reformed rather than extended because of the increased exposure for individual growers of all sizes.
The joint statement released February 8 by ICGA and the other state corn grower groups points out that today's higher grain prices come with higher input costs—meaning much greater financial risk and uncertainty for farm families.
Under the current proposal in Congress for a new farm bill, a producer who experienced yield losses similar to those farmers in some areas of the country faced in 2005 would have no real safety net available to help them farm another year. Farmers need a program that provides assistance when they need it most, not one that is in place because "we've always done it that way."
"Current farm policy is making it very difficult to negotiate international trade agreements and to grow our exports, so a revenue-based bill would help address this concern," says Art Bunting, president of the Illinois Corn Growers Association. "We also need to remember this is the nation's farm program, not just farmers. The revenue-based concept is more consumer-friendly and will save taxpayers funds over time without sacrificing access to the reasonably priced corn-based products we have all come to expect."