The Iowa and National Corn Growers Associations are pushing a new proposal that would replace two government payment plans for farmers.
The group’s idea is to get rid of federal disaster payments and the federal “Loan Deficiency Program” payments which provide farmers money when the market dips. The Corn Growers propose, instead, a new kind of “revenue assurance” from the federal government. Sort of like insurance, it would assure farmers earn at least 70 percent of their average income.
Keith Sexton, a farmer from Rockwell City who is president of the Iowa Corn Growers Association, outlined the idea at a Senate Ag Committee field hearing in Ankeny. “We believe that a safety net based on revenue rather than price has significant advantages, especially for new entrants into farming,” Sexton says.
Sexton argues the federal government would end up saving money with the shift. The Corn Growers contend their “revenue assurance” alternative would better ensure farmers get payments from the federal government when it’s most needed. “Farmer support for retaining the current programs likely come from those producers with substantial equity who feel that sticking with the current program is just plain easier,” Sexton says. “Given our organization’s long-term vision and desire to see beginning farmers come into our production industry we come down firmly on the side of a revenue program.” Other commodity groups are reviewing the idea.
A Georgia Senator convened this (Monday) morning’s Farm Bill hearing in Ankeny. Senator Saxby Chambliss, a Republican, is chairman of the Senate Ag Committee and he provided packages of peanuts to panelists. “I just want you to know as a member of the Senate, I am traveling to Iowa at the request of Senator Harkin and Senator Grassley. I am not running for president,” Chambliss said, to laughter. “I may be the only member of the Senate not running, but I am here to talk about agriculture this morning.”
Chambliss called agriculture the country’s number one industry. “It’s the heart and soul of the economy of our country,” Chambliss said. “As we move into the writing the next Farm Bill, you’re going to hear us talk a lot about agriculture now becoming a national security issue.”
Iowa’s two U.S. Senators are members of the Senate Ag Committee and both sat in on this morning’s hearing. Senator Tom Harkin is the top-ranking Democrat on the panel. “I think our biggest challenge for the next Farm Bill is a bold and creative vision for U.S. agriculture — one that promotes diversity, enhances profitability, protects the environment, encourages rural economic development and a quality of life in rural America,” Harkin said.
Senator Charles Grassley, a Republican, warned that there’s a need for stricter restrictions on federal farm payments in order to maintain public support for such spending. “Farm programs are really under scrutiny now in Washington, D.C. not just because of the 10 percent of the farmers getting 72 percent of the benefits,” Grassley said. Grassley pointed to spending abuses within the federal farm program, such as farmers who received disaster assistance because of a drought, but the drought that did not affect their farming operation.
Congressman Leonard Boswell, a Democrat from Des Moines, is a retired farmer who contends federal farm policy must help ensure that farmers make a profit. “We have to cash flow,” Boswell said. “Those of us who went to the Farm Crisis a few years ago know what it means to go to the bank and work out your cash flow statement.”
According to Boswell, it might make sense to continue current federal farm policy until international trade negotiating sessions are done so U.S. officials won’t be forced to defend new U.S. ag policy in the negotiations.