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Direct payments could be cut in bill

March 26, 2012

Cargill Grain and Oilseed Supply President Mark Stonacek spoke on the agricultural market and the increase on demands for food on Saturday.

TROY — Removing direct payments from the 2012 Farm Bill leaving farmers to rely more heavily on crop insurance grabbed the attention of farmers and others gathered Saturday at the 21st annual Farm Forum.

The event, held at Troy Christian Elementary School, is hosted by House Speaker John Boehner, R-West Chester.

While talk revolved mainly around the 2012 Farm Bill, many other topics both inside and outside the farming industry were touched on by  Boehner and members of a select panel.

When Congress failed to reach an agreement on a deficit reduction plan, the agriculture industry became one of the big targets geared at trimming $500 billion in spending. Among areas of focus for cuts include direct payments and crop insurance.

The panel included Ohio Farm Bureau Federation Public Policy Vice President Adam Sharp. House Committee on Agriculture Chief Economist Bart Fischer, Ohio Department of Natural Resources Division of Soil and Water Resources Chief Karl Gebhardt and Michael Torrey Associates President and CEO Michael Torrey. The panel agreed that farmers need to brace themselves for the end of farm subsidy payments.

“When you look at the reality of it, the days of the direct cash payments are over,” Sharp said. “There was a big change and a lot of Republicans came into Congress with a challenge to cut the budget.”

All of the panelists feared that farmers will see a disproportionate amount of cuts as elected officials try to cut spending and develop a 2012 farm bill at the same time.

Sharp commented total farm bill spending could be cut more than $23 billion during the next decade. Eliminations in the farm bill would likely include direct payments, ACRE, SURE and CCP as the currently stand.

Sharp said legislators needed to focus on the fact that the budget cannot be balanced on agricultural cuts

“Less than two percent of the federal budget comes from the farm bill,” Sharp said.

While all panelists were in agreement that a farm bill would pass this year, the details and the effects it may have were still in question. The Deficit Reduction Committee began its talks on budget cuts in September.

Gebhardt said efficiency is the key.

“We need to target priorities so we can funnel resources into an effort that’s going to solve problems,” Gebhardt said. “I’ve learned the last three months that it is very hard to steer the political ship. We have to keep trying. They listen to numbers.”

All agreed crop insurance will be a farmer’s best guarantee to protecting against a bad year in production in the future.

“Crop insurance is now becoming the focus of the safety net for farmers,” Fischer said.

Torrey said Farm Service Agency members are ready to take on the industry if there is an influx of crop insurance customers.

“Studies suggest the FSA can deliver insurance in a more efficient manner,” Torrey said. “We’ve got 20,000 folks out there that are trained and ready to go.”

Cargill Grain and Oilseed Supply President Mark Stonacek spoke on the agricultural market and the increase on demands for food.

“China and India are emerging,” Stonacek said. “We need to trust the market and trust the farmers. We need to rely on free trade and the market can be better prepared for volatility.”

Boehner closed the meeting by speaking on several topics and answering questions from the audience. He said the government needed to get out of the way and let the market work.

“We represent 2 percent of the world’s population but 25 percent of its production,” Boehner said. “More government means more costs and it makes us less competitive. There are developing countries. Something that happens in developing countries is they want to eat better as they develop. Maintaining our position will be a challenge.”

Boehner said government needs to come up with solutions and stay out of the way and let the system work.

“I would argue that the president’s policies have hurt more than they have helped,” Boehner said. “The election will be a referendum of the president’s policies. The American people vote on their pocket book.

“You have about 47 percent of the people who will vote for him and 47 percent who won’t,” he said. “It will be that other 6 percent that don’t know what they are going to do that will decide the election.”

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