Farmers worry over proposed legislation

May. 26, 2013 @ 06:54 PM

Once again, Congress is laboring to pass a farm bill that deals with crop insurance and crop price subsidies.
Tobacco farmers may have dodged a bullet last week. The Senate defeated an amendment that would have eliminated federal subsidies for tobacco crop insurance. There have been efforts to cut supports for 80 types of commodities from cotton and peanuts to hogs and poultry. The Senate passed a farm bill last year, but the Republican House leadership did not bring it up for a vote. Congress passed a one-year extension which expires Sept. 30.
“This gets complicated,” said Denton dairy farmer Les Crouse. “Sometimes you think you need to be a lawyer to understand it. I’d  hate to see these programs go away for the small farmers who need them.”
Crouse says many small farmers can’t keep their businesses going without subsidies, especially in hard time. Crouse qualifies for dairy, livestock and crop subsidies and insurance. Crop and dairy subsidies support prices, and the government also can pay farmers to help with their insurance.
The Senate version of the farm bill would focus on avoiding an oversupply of milk. Instead of receiving subsidies, farmers could buy insurance against hard times through the proposed Dairy Security Act. The government would pay part of the costs. It’s a balance, Crouse said. If milk prices fall and feed costs rise, costs easily could spiral out of control.
“This may not fly,” Crouse said. “It is hard to have an adequate supply of milk. We need to be careful. We want to avoid the disaster we had in 2009 when prices fell and costs rose. I try to control my costs by raising feed for the cows. It would be hard for me if I did not do that.”
Bills in the House and Senate would create a new crop insurance program to cover smaller revenue losses on planted crops. Some subsidies have been controversial because the government pays out every year, regardless of crop prices or crop yield. Both bills would raise “target prices” for some crops. Certain subsidies kick in if prices drop to those targets so that farmers would receive payments only if prices are low. The Senate bill would make it easier for the subsidies to kick in.
“Commodity prices have been good the last couple of years, and the export market has been good too, so there has been little need for subsidies,” Crouse said. “In the 80s, 90s and early 2000s when things were not good, subsidies were more important. Things run in a cycle. They could go down again.”
Both five-year farm bills would cost almost $100 billion annually, with almost $80 billion going to food stamps. The Senate bill would save about $2.4 billion yearly from current spending, and the House bill would save almost $4 billion.
• Tobacco: The tobacco insurance amendment offered by Sens. John McCain, R-Ariz., and Dianne Feinstein, D-Calif., would have eliminated taxpayer support for insurance on tobacco crops. Tobacco farmers could still buy crop insurance, but there would be no federal subsidy. Supporters say the subsidies are needed to help keep small tobacco farmers in business. The American Cancer Society and others who want to end subsidized crop insurance for tobacco said their plan would save $333 million over the next 10 years.
North Carolina is the nation’s No. 1 tobacco producer, and the state’s senators, Democrat Kay Hagan and Republican Richard Burr, fought the amendment. | 888-3626

North Carolina’s Agriculture Economy

• $77 billion contributed to state economy
• 18 percent of state income
• 17 percent of work force
• 50,400 farms; 2,000 small tobacco farmers.
• More than 80 types of commodities

State Rankings
• No. 1 In tobacco and sweet potatoes
• No. 2 In Christmas tree cash receipts
• No. 2 In production of hogs
• No. 2 In turkeys
Source: N.C. Department of Agriculture and Consumer Services