WASHINGTON – Senator Chuck Grassley today said that the farm bill that passed the Senate Agriculture Committee was a step in the right direction, but he hoped that further reforms would be included when the bill is debated on the Senate floor.
“The farm and nutrition bill provides some needed reforms, and moving this bill out of committee gets us one step closer to providing our farmers and rural communities the certainty so many of them desire. Chairwoman Stabenow and Ranking Member Cochran incorporated reforms that make the farm program more defensible and effective. By including my payment limits reform they showed a real effort to put together responsible programs that ensure a safe and stable food supply for the American people while giving certainty to farmers and rural communities,” Grassley said. “Now that the bill is moving forward, we can look at additional reforms and continue to improve the bill.”
Grassley has long sought reform of the farm payment system. His provisions that were included in the bill are nearly identical to legislation he introduced earlier this year that would place a hard cap on the farm payments an individual farmer can receive in a year and close long-abused and well-documented loopholes in the farm payment program. The legislation would establish a per farm cap of $50,000 on all commodity program benefits, except those associated with the marketing loan program (loan deficiency payments and marketing loan gains), which would be capped at $75,000. Thus the combined limit would be $125,000, or, for married couples, $250,000. The $50,000 cap would apply to whatever type of program is developed as part of the new Farm Bill. The bill also closes loopholes that currently allow non-farmers to qualify for federal farm payments and would allow one off-farm manager, but only one.
In addition, an amendment sponsored by Grassley along with Senators Mike Johanns, John Thune and Pat Roberts was approved during today’s Agriculture Committee action on a new farm bill.
Grassley said the measure is intended to make the farm bill more market-oriented in the way target prices are set. Grassley would have preferred that a target price program not be included in the bill, but since the target price program was included he wanted to push for ways to make it more market-oriented. For commodities except rice and peanuts, the measure set the target price by averaging the prices from the five previous years, while dropping the low and high price for that average, and multiplying it by a factor of 55 percent.
“Target prices distort planting decisions, and I hear opposition to target prices from farmers in Iowa, so this is an effort to move toward a market orientation as much as possible,” Grassley said. “That way, if peanut and rice farmers want to protect a high price set by congress, they can fight that battle, but other farmers won’t have to defend high target prices.”
Grassley did not have the opportunity to offer his amendment that would restrict the Environmental Protection Agency’s ability to release personal information to environmental activists. Grassley’s amendment follows the EPA’s release of information to activists on 80,000 farmers nationwide. Grassley said that he is preparing the amendment for floor consideration.
Here is a copy of the text of Grassley’s opening statement at the mark-up.
Prepared Statement of Senator Chuck Grassley
Agriculture Committee Farm Bill Mark-Up
Tuesday, May 14, 2013
First of all, I want to say thank you Madam Chairwoman and Ranking Member Cochran. You both have been working diligently to get us here today to another mark up of the farm bill. It is not an easy process to get a farm bill ready for committee consideration, but I appreciate all the work that has gone into making this happen today.
I supported the bill we passed out of the Senate last year. It was not a perfect bill, but it included some important reforms, and would have provided the certainty our farmers were requesting. Beyond certainty for farmers, by getting a farm bill completed, we give certainty to rural communities, conservation initiatives, and people who are truly struggling to put meals on the table for their families.
Many of the reforms from last year’s bill are again included in the Chair’s mark. I appreciate the inclusion of my payment limits reforms. Having responsible payment limits on the commodity program is crucial to the defensibility of the farm safety-net. We need payment caps on our commodity programs, and we need to close loopholes that have allowed non-farmers to game the system. The status quo must change. Farm program dollars going to those who aren’t actually farming is an offense to the American taxpayer and to the farmers who actually grow this nation’s food.
So let me just say thank you again to the Chair and Ranking Member for agreeing to put these payment limit reforms in the mark. In addition, the mark also reflects the priority many of us share, which is to maintain crop insurance. No matter where I go in Iowa, farmers keep stressing the importance of crop insurance.
In regards to other reforms in this bill, ending direct payments is another reform the committee can point to as an important step. However, I still have serious reservations about the programs created in the Chair’s mark that would replace direct payments. The shallow loss, or Agricultural Risk Coverage, program certainly is more market-oriented than direct payments, but I continue to have concerns with how the program will interact with crop insurance.
But my bigger concerns are with this new target price program. This proposed program falls short of the reform-minded approach we approved last year. Setting high target prices for any commodity is bad policy. The federal government has been down that road, and it does not work. It is not good for farmers, and it is not good for taxpayers. We need programs that have farmers making decisions based on the market, not based on how much money they will get from a government program.
Another area of reform the committee has worked on over the last two years is in dairy policy. I understand current policies may not be providing the assistance needed. But after listening to many of my dairy farmers and processors in Iowa, I would also like to express concern with the proposal to put a supply management system in place. Similar to how we shouldn’t have crop farmers planting for government programs, we shouldn’t have policies that induce dairy farmers to artificially adjust production.
Furthermore, it continues to trouble me that we have not been able to have a more constructive discussion on how to find savings in the nutrition title. We should have found more savings in the nutrition title last year, and unfortunately we are headed down the same path this year.
Some of my colleagues have put forward very thoughtful proposals that would save money from nutrition programs, and these proposals are simply good government reforms. This is not about taking away the benefits of those who really need food assistance. It is about making sure we don’t have wasteful spending on things like paying states bonuses in the food stamp program for simply running the program they way it’s supposed to be run.
I have highlighted some of my concerns with this bill, and I have laid out some of the positives. Is this bill perfect? No. But it does provide some needed reforms, and if we move this bill out of committee today, we will be moving one step closer to providing our farmers and rural communities the certainty so many of them desire.
I look forward to working with the Chairman, Ranking Member, and others to have a defensible and effective farm bill.