We like the direction House Agriculture Committee Chairman Collin Peterson wants to take the 2012 Farm Bill.
The Minnesota Democrat says his committee will soon begin work on the bill, and he hopes to make some dramatic changes to crop insurance and price support programs.
With regards to crop insurance, Peterson wants to eliminate the flat fee farmers now pay in favor of a fee more consistent with what's actually being insured. That would allow farmers to buy insurance that fits their individual situations, and allow limited USDA funding to be stretched further.
He would also like to eliminate direct payments program crop farmers now get regardless of whether commodity prices are high or low in exchange for a system that protects farmers against economic losses when prices actually fall below the cost of production.
Both ideas are worth talking about in the process of writing the final bill. But the pros and cons of his proposals aren't the point. We agree with Peterson that real farm program reform is necessary, and that changes will be forced on farmers and ranchers by the realities of budget politics.
First, the spending priorities of the Obama administration have already moved dollars from farm programs to nutrition programs. The next farm bill should retain some reasonable focus on food production and farmland conservation, and not gut the farm safety net further in favor of welfare programs.
The real 800-pound gorilla in the room, however, is the rapidly growing federal debt. Interest payments on that debt will reduce money available for any other government spending. It is likely that actual farm program spending will decline over the life of the next bill.
Peterson has 32 months to bring the next bill in on time. His committee, and their counterparts in the Senate, will need every bit of that time to produce the reforms necessary to produce a viable farm safety net and meet the new budget realities.