Big changes planned for 2012 Farm Bill

Mitch Lies/Capital Press U.S. Rep. Collin Peterson, D-Minn., left, talks to farmers March 30 at the North Willamette Research and Extension Center in Aurora, Ore. Rep. Kurt Schrader, D-Ore., looks on.

Peterson stumps for overhaul of price programs, crop insurance

By MITCH LIES

Capital Press

AURORA, Ore. -- House Agriculture Committee Chairman Collin Peterson, D-Minn., in the next few weeks will start work on the 2012 Farm Bill, 32 months before the bill is due for completion.

Given his ambitious goals, that might not be time enough.

Peterson and fellow Agriculture Committee member Rep. Kurt Schrader, D-Ore., met with farmers on March 30 at the North Willamette Research and Extension Center in Aurora. He laid out an aggressive agenda for the next farm bill that includes an overhaul of some long-standing farm programs.

"I think we have to do it or someone else will do it for us," Peterson said, "someone who doesn't know what they're doing.

"There are a lot of people out there that don't like the farm bill," he said. "So we're going to take a look at it. Whether we can convince people to change, we'll see. But we're going to try."

Peterson has encountered some resistance over his proposals, he said, but he believes the changes can benefit small farmers, large farmers, specialty crop farmers and program crop farmers.

"It's not going to be an easy thing to do," he told growers in Aurora. "It's going to take time. And that's part of what I'm trying to do here."

One big item on Peterson's agenda involves changing USDA's crop insurance from a crop-by-crop program to a whole-farm program.

As part of the proposal, the USDA would eliminate the flat annual fee growers pay for insurance in exchange for a fee more consistent with what's actually being insured.

"I've gotten some resistance from some of my people because they've got this mentality that they buy crop insurance kind of as a marketing tool," Peterson said. "It's not really insurance.

"What I'm looking at is getting a system where you can have insurance to cover the cost of what you've got in that crop, or something close to it," he said. "So if you have a loss, you could cover your bank loan and you could farm another year."

Currently, he said, about 400 different crops are insured through USDA's crop insurance programs. Insuring smaller crops, he said, is expensive for growers and the government.

Under his proposal, farmers and ranchers could buy insurance to cover perennial crops, cover price drops or other factors that can decimate a farm's bottom line.

"The idea is you could buy insurance that would fit your situation, whatever your situation might be," Peterson said.

Peterson believes the proposal could help stretch what are expected to be limited funds available for farm programs in the next farm bill and help a multitude of crops.

"The idea is if we went in this direction, we would have resources to cover all crops," he said.

A second big part of Peterson's agenda involves changes in price supports. A key to that proposal involves doing away with loan rates.

"The loan rates are so low that if we get the loan rates, we're out of business," Peterson said.

"And I can't raise them. I don't have the money to raise them enough to make any difference.

"Price supports are just too darn low," he said.

Removing the loan rates and changing price supports to an approach that takes into account crop loss due to natural forces and price losses due to the economy will put farmers on better footing, Peterson said.

"If we get the whole ag system on a different plane that we can explain to people in town, I think we're all stronger.

"People can understand you guys needing protection on your price and covering your production. They don't understand why people are getting payments just because you're farmers," Peterson said.

"What I'm trying to do is keep the average commercial farmer in business and then try to get a system where the young people can come in and have the kind of protection that they can take to the bank and borrow against to be able to do this," he said.

Peterson plans to take his proposals on the road in May and June, then stand down until after the mid-term elections. He plans to start formal hearings in May of 2011 and hand the Senate a completed bill by the end of 2011.

The hope, he said, is Congress can wrap up the bill by the August 2012 recess.

The 2008 Farm Bill expires in November of 2012.

"The last four or five farm bills have been a year to a year and one-half late," Peterson said. "I am determined to do my part to get the (2012) bill done on time."

One overarching reality Peterson expects to face in the next bill is reduced spending authority brought on by the high federal debt.

"My position is everybody needs to be treated equally and fairly," he said. "If they reduce spending in other areas, then I'm OK with reducing spending in agriculture.

"But I'm not OK with them saying, well, you're going to get cut 30 percent and everybody else is going to get cut 2 percent.

"But I am OK with doing our part," Peterson said, "because I think we're heading into uncharted territory that we've got to deal with somehow or another."

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