Upon yesterday’s agreement between House and Senate farm bill negotiators on the bill’s spending level, the American Corn Growers Association (ACGA) sent the letter posted below to both agriculture chairmen offering suggestions and help in advancing the policy content of the legislative measure. ACGA stands out among commodity organizations in that the organization’s bylaws prohibit donations from agribusiness corporations which they feel allows them to better represent framers.
The Honorable Tom Harkin, Chairman
Agriculture, Nutrition and Forestry Committee
United States Senate
Washington, D.C. 20510
The Honorable Collin Peterson, Chairman
Committee on Agriculture
United States House of Representatives
Washington, D.C. 20515
Dear Chairmen,
The American Corn Growers Association (ACGA) wishes you the best of luck in your ongoing endeavors to complete a new farm bill. We commend your leadership and fully understand your frustrations in dealing with the current political environment. This is why ACGA offers one possible solution to the funding issue as well as a few suggestions for your conferees when determining which measures of the two bills to include in the final bill.
While ACGA would have preferred more consideration of the Food from Family Farms Act (FFFA) as presented in our testimonies last year and endorsed by over 60 other organizations, we are prepared to endorse the new bill as it will be far superior to the current bill.
We respectfully suggest that you investigate one option to help you advance the farm bill past the current funding obstacles and improve the safetynet for farm families. Given the current prices being paid to producers for most farm products, farmers may find it easier to survive without the Fixed Payments. We feel that the $5 billion per year required to fund the Fixed Payments may be better spent in an initiative to increase Marketing Assistance Loan (MAL) rates. We recommend that you investigate how much we can increase MAL rates if all or a major portion of the $5 billion per year is used.
Although farmers are now experiencing higher prices, they also are facing much higher production costs. In the event the market prices erode to the more traditional low levels of the past decade, ACGA deems higher MAL rates to be much more critical to the financial survival of family farmers. Using either the current budget baseline, or the updated budget baseline to be released next month, higher loan rates should cost very little. Should the market crash, the Loan Deficiency Payments (LDPs) and Marketing Loan Gains (MLGs) provided by higher MAL rates would be mandatory federal spending and therefore provide the best safetynet for the budget available.
ACGA also supports the beneficial interest requirements included in the Senate bill for the MAL program. This provision was a part of our 2002 farm bill proposal and would help strengthen domestic and international market prices. The problem is that farmers tend to exercise their options on LDPs and MLGs at times when the market is at its lowest, thereby driving the market even lower. By limiting the MAL options to the date that beneficial interest is actually lost, we can partially reinstate the benefits from the overall price supporting aspects of the classic nonrecourse loan program. Such price support will help reduce farm program expenditures and help farmers in the U.S. and around the world receive more of their income from the market.
As for renewable energy, ACGA has been a leader for our entire existence. We not only support the expansion of the Title IX programs, but we also fully support all of the renewable energy and biomass provisions contained in the “Heartland, Habitat, Harvest and Horticulture Act