By Adam Goldstein
WASHINGTON — Commodity trade group leaders at a U.S. House Agriculture subcommittee hearing this week advocated for bolstered risk management programs and maintaining foreign market access as tools to support farmers amid volatile times.
The industry representatives said supply chain disruptions and increased production costs have tightened margins for large-scale farmers, and decreased the effectiveness of commodity and crop insurance programs in supporting them amid disasters. Such federal programs are intended to lessen the risk of farming for producers of major commodities like corn, wheat, soybeans and other crops.
The commodity group leaders emphasized the need to avoid any cuts to crop insurance and commodity programs in the farm bill, especially with a decline in projected farm income. They are considered to be the “most important” tool among producers to respond to natural disasters and challenges with overseas markets.
The farm bill’s commodity insurance programs include the Agriculture Risk Coverage and Price Loss Coverage programs, which protect farmers from poor growing seasons and low prices, respectively.
“As the risk challenges of farming continue to mount, I think it is safe to say that if you’re not farming today, you’re likely not going to be farming tomorrow,” said Republican Rep. Austin Scott of Georgia, chairman of the House Agriculture General Farm Commodities, Risk Management, and Credit Subcommittee.
“As we deliberate we must make sure we’re doing everything we can to help all beginning young and small farmers and taking care of future generations.”
The existing plans reimburse farmers at a rate linked to a market average price set in the 2014 farm bill, and a farmer’s base acreage of a certain crop or harvested yields for previous years.
The programs are available to a range of commodity farmers, and insurance payouts under the 2018 farm bill totaled $33 billion from 2018 to 2023.
Hearing sought for minority, disadvantaged farmers
Democratic committee members agreed on the need for a robust safety net for all producers.
Still, party leaders highlighted issues of an imbalance in payouts from crop insurance programs between large-scale and historically underserved farmers found by the government watchdog Government Accountability Office, and the absence of diverse voices among the witnesses.
“Our nation’s strength in agriculture and as a people is our diversity,” said Rep. Shontel Brown, an Ohio Democrat and ranking member on the subcommittee. “Mr. Chairman, I hope it is easy for you to agree that a critical component of writing a farm bill that works for all is ensuring that everyone is invited to sit at the table.”
Brown submitted a request into the record that a hearing be held for “minority and disadvantaged farmers and stakeholders on farm bill issues relating to this subcommittee.”
The farm bill is a multiyear omnibus law which authorizes an array of agricultural and food programs, including federal crop insurance, food stamp benefits and farm resource conservation.
The 2018 farm bill expires at the end of September 2023, was projected to cost $867 billion over 10 years when enacted, and has cost roughly $428 billion over the past five years. Baseline spending for the coming farm bill is projected at $1.5 trillion over the next 10 fiscal years, according to the Congressional Budget Office.
Increasing reference prices
Commodity group leaders angled for legislators to keep cuts to commodity insurance and crop insurance programs off the table, while increasing what are called reference prices.
Title I is the commodity assistance title of the farm bill, which contains the commodity insurance programs, certain disaster relief programs for crops like sugar, and a fixed-rate loan program that uses commodity stocks as collateral.
Reference prices are the set average commodity market prices for goods that factor into insurance reimbursement rates, along with the previous year’s planted acreage or harvested crop yields. Those reference prices haven’t increased since 2012.
