Fincher: Farm bill will bring big changes
Crop subsidies will disappear, Tennessee Republican says
Farmers better get used to the idea that federal crop subsidies will likely disappear when the 2012 Farm Bill takes effect in September, U.S. Rep. Stephen Fincher, RFrog Jump, said Tuesday.
The Senate began its review of the five - year farm bill last week. Negotiations on the legislation are expected to take weeks.
The new farm bill is expected to cut $23.6 billion over 10 years by cutting payments to farmers, conservation programs and nutrition programs like food stamps.
Some senators want to cut the $5 billion direct payment program, which pays owners of farmland a set amount regardless of whether they have planted crops. Instead, they want to set up a $3 billion crop insurance subsidy to help farmers cover their losses before their crop insurance policies kick in.
Crop insurance has existed for decades, with the government now spending about $7 billion a year to pay about two -thirds of the cost of farmers’ premiums. Under the federal program, farmers can buy insurance that covers poor yields, declines in prices or both.
“I know firsthand — still having an active part in the farm — how important the safety net is, but at the same time we all know we have to tighten our belts and the subsidy program as we’ve known it is probably going to disappear,” Fincher said before a lunch event for the Bartlett area Chamber
of Commerce.
Fincher is an owner of Crockett County’s Fincher Farms, and said agricultural safety-net programs “are not for the farmer, but for making sure we have a safe, economical food source for the American consumer.”
The new farm program, Fincher said, will be changing to a market- driven insurance product and, indeed, provide a safety net for farmers should prices fall or bad weather strike.
But Southern farmers have criticized the legislation, saying it does not provide adequate protection for cotton, rice and peanuts. Also, agriculture experts say crop insurance seems like a good deal when crop prices are high, as they are now.
“Relying only on insurance products — as appealing as that sounds — does not provide the safety net for the bad times that are sure to come,” according recent policy paper by Daryll E. Ray and Harwood D. Schaffer of the Agricultural Policy Analysis Center at the University of Tennessee in Knoxville. “Crop insurance is an excellent tool to insure farmers against random risks — risks like hail damage — but a safety net it is not.”
The UT policy analysts said insurance revenue guarantees are often tied to prices, which might not be enough to protect farmers if prices dip drastically. They suggest raising crop target prices to help cover a significant portion of the cost of production, “something that the current target prices do not provide.”
The farm bill has not yet been scheduled for floor action in Washington.
— Toby Sells: (901) 529-2742