Page 16 - Farm Bill Series_The 7 Things You Should Know

One thing they knew for sure: Direct payments, which were included in the 1996 farm bill after
another period of major farm bill reform, were not going to be politically possible in the future.

Indiana Farm Bureau President Don Villwock told his colleagues that direct payments
were “toast.”
But what – if any – type of program or crop insurance policy, would provide risk management in
the future?

Most of the options had some form of risk management with a wide variety of long-winded and
sometimes catchy names.

The National Corn Growers Association (NCGA) Corn Board liked the idea of a revenue-based
risk management program and voted in December 2011 to support the “Aggregate Risk and
Revenue Management” (ARRM) legislation as introduced by Sens. Sherrod Brown, John Thune,
Dick Durbin and Lugar.

The American Soybean Association (ASA) originally supported “Risk Management for
America’s Farmers” or RMAF, which would establish commodity-specific revenue benchmarks
for individual farmers based on historical yields and prices, and compensate them for part of the
difference when current-year revenue for a commodity on their farm falls below a percentage of
the benchmark.
Bob Stallman, then the president of the American Farm Bureau Federation, discussed AFBF’s
Systemic Risk Reduction Program (SRRP) proposal at the group’s annual meeting in January
2012, which he said would help protect farmers from catastrophic losses while recognizing
current budget realities. In addition, by almost a two-to-one margin, the delegates defeated an
amendment that would have allowed a patchwork of support through multiple programs
for different commodities and regions.

The National Farmers Union endorsed a 2012 farm bill proposal which incorporated the use of a
farmer-owned inventory system, loan rates and set-asides. They called their proposal: Market-
Driven Inventory System (MDIS, pronounced Midas).

Cotton growers needed to come up with an alternative that removed them from the cross hairs of
an ongoing World Trade Organization (WTO) case, brought by Brazil. The National
Cotton Council endorsed a “Stacked Income Protection Plan,” dubbed STAX, which was
designed to complement existing crop insurance programs.

The U.S. Rice Producers argued against a one-size fits all approach to risk management. Travis
Satterfield, a Mississippi rice farmer who testified at a Senate Agriculture Committee hearing on
March 15, noted, “We need a program that is financially meaningful to producers. The best way
to do that is have each group craft a program that best fits their needs.”

Regional divisions emerge

Needless to say, there was no consensus. But the Senate Agriculture Committee forged on,
passing a bill out of committee on April 26, 2012.

14 www.Agri-Pulse.com