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Southern game changer
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The farm bill died in the 112 Congress, but Southern farm groups who had been worried about
Roberts’ influence on the Senate Agriculture Committee had a new reason to cheer on Jan. 3,
2013.
Unable to stay on as ranking member of the powerful Appropriations Committee, Thad Cochran
asserted his seniority over Roberts and was selected to take over as ranking GOP member of the
Agriculture Committee. The senator had previously served as committee chairman from 2003 to
2005. In his new role, he and his staff planned to make sure that Southern interests were well-
represented in future farm bill debates.
The committee released a new, 1,102-page farm bill draft in early May 2013 – largely including
many of the previous year’s changes, but with several changes that reflected Cochran’s
influence.
Stabenow noted that, with key changes in the latest mark, passing the farm bill would yield a
total of $23 billion in cuts to agriculture programs – the same level as the previous year’s effort.
As expected, direct payments, the Average Crop Revenue Election Program and the
Supplemental Revenue Assistance Program were all eliminated.
The Agriculture Risk Coverage (ARC) program, which was introduced in the Senate mark,
remained. But in order to trim costs, the price band was set at a slightly lower range of payment
(88 percent instead of 89 percent) and prices were to be calculated on a 12-month time frame,
rather than the first five months of the marketing year. The measure included the Supplemental
Coverage Option, whereby producers could purchase a policy on top of their individual crop
insurance coverage to cover all or part of a producer's deductible.
However, the bill included several new provisions – long sought by cotton, rice and peanut
interests – who had maintained that some of the traditional forms of risk management don’t work
for them like they do in the Midwest.
For example, in addition to a revenue coverage program that was the centerpiece of the Senate
Ag Committee’s commodity title in the previous year, the draft called for a new “Adverse
Market Payment,” or AMP program, based on making payments when prices drop below
reference prices.
Basically, it’s a counter-cyclical program (CCP) with enhanced rates for rice and peanuts, while
the target prices established in the 2008 farm bill remain the same for all other commodities.
The reference price for rice was set at $13.30/cwt, up from the previous target price of
$10.50/cwt. And the peanut target price was increased from $495/ton to $523.77/ton. Rice and
peanut producers would be able to update their yields, generating potentially even more
payments. Peanut producers would also be able to update their base acres.
Like the previous year, a new Stacked Income Protection Plan (STAX) for producers of upland
cotton would also be part of the package with a few minor differences.
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