‘Safety net’ hinders farm bill talks

House Agriculture Committee Chairman Frank Lucas (R-Okla.) says progress is being made on the farm bill, but has stopped short of predicting that a bipartisan deal will be struck before Thanksgiving.

“We started way, way far apart and we’re getting closer,” he said on Friday. 

{mosads}The chairman said that the key debate negotiators have been focusing on is whether to give producers the choice of a revenue-based or price-based support, as in the House farm bill, or to give producers both types of coverage as in the Senate. 

“The struggle has been how you deliver the safety net. Do you have choices for producers to pick from? Do you have an all-inclusive program?” he said.

The House bill has a choice of Price Loss Coverage (PLC), which pays when the market falls below reference prices, and Revenue Loss Coverage (RLC) program, which pays farmers when revenue falls between 75 percent and 85 percent of a five-year average. 

The Senate offers both a price-based Adverse Market Payment (AMP) program and an Agriculture Risk Coverage (ARC) program, which pays when revenue falls below 78 percent and 88 percent of the five-year average. 

The Senate can offer both because it has less generous price supports with the AMP having lower reference prices than in the House bill.  Southern commodities, as oppose to corn and soybeans made in the Midwest, tend to favor the House approach and don’t see a “shallow-loss” revenue scheme as useful.

Lucas said that going to an all-inclusive system will mean less money within each type of coverage.

Asked if the House is willing to lower its reference prices, Lucas signaled that may not be the case.

“I don’t know that I would say that. It is more the delivery mechanism and how you count things,” he said.

The answer could signal compromise is coming in the way a farmer’s acres are calculated rather than on target prices. 

One of the key differences in the House bill is the greater use of planted acres than historical acres, something critics call trade distorting because it could encourage planting.

“Every comma and every semicolon makes a huge amount of difference,” Lucas said.

The chairman said that food stamps are also being discussed but sources generally feel that the whopping $33 billion difference on food stamp cuts between the House and Senate farm bills will be the last item to be negotiated.

Lucas noted that he has never predicted a farm bill deal could be made next week, although Ranking Member Rep. Collin Peterson (D-Minn.) was bullish enough to say it could happen on Thursday.

“That I believe was something colleagues of mine said rather than me,” Lucas said. 

On the other hand, he did not see Speaker John Boehner’s (R-Ohio) insistence that the farm bill be kept separated from any budget conference deal as a bad thing. 

Boehner had been asked about using the up to $51 billion in savings in the farm bill as a way to replace sequester cuts on Thursday. His answer appeared to dishearten those who think a budget deal could be the vehicle for finally getting a farm bill done after two years of delays.

“My interpretation that meant we will not be receiving policy instructions from anybody in order to achieve certain dollar numbers. And whatever savings we achieve would be available for whatever purpose. And in all fairness that is the best I can ask for,” Lucas said.