WASHINGTON (Mar. 13, 2008)—Growing frustrated and worried about the endless stalemate over the farm bill, U.S. farmers and ranchers are calling on Congress to put differences aside in the interest of quickly passing a bill with a safety net that reflects the best of both the House and Senate passed bills.
“It has been eight months since the House passed a bill and about half that long since the Senate passed its bill,” said Jerry McReynolds, a Woodston Kansas wheat farmer. “We appreciate the honest differences on Capitol Hill, but wheat in my area was planted in October and we need to know where we’re at. We respectfully urge that these differences be put aside now for the greater good.”
The 2002 farm bill expired in 2007. While short term extensions have kept some farm bill initiatives operating, they do not effectively cover the 2008 crop, some of which is already in the ground or even being harvested.
Producers are also quick to point out that these short-term extensions fail to provide any long-term certainty for farm families. While higher prices for some crops and the availability of crop insurance have helped producers obtain credit despite the absence of a farm bill, farm families are growing very anxious as costs of production sky rocket.
“There is a tendency to see the current economic situation on the farm through rose-colored glasses, but the truth is that not all producers are experiencing high prices, not all will make a crop, and even those who have both are extremely nervous,” explained Jeff Krehbiel, a wheat farmer from Hydro, Oklahoma. “If prices soften just a little there is going to be lot of pain to go around even with a safety net in place because of where costs of production are.”
By the end of 2008, the USDA’s Economic Research Service (ERS) forecasts that fuel prices will have risen 159 percent since 2002. ERS also indicates that fertilizer costs are driving the current increase in expenses and may be a greater concern for farmers than fuel.
Following a $2.7 billion (20 percent) increase in 2007, fertilizer expenses are forecast to rise $3 billion in 2008. The prices for potash and phosphate alone rose nearly 57 percent during 2007. The cost for urea, a nitrogen-based fertilizer, has climbed by an astounding 150 percent since 2002.
Between 2006 and 2008, seed costs are estimated to rise 14.3 percent. Pesticide expenses are on their way up, too, with a projected increase of 11 percent in 2008.
“We are worried to death that higher prices for some crops may be a temptation to cut the safety net,” Tommy Hoskyn, a Stuttgart, Arkansas rice grower said. “We are counting on the understanding of lawmakers that the 2008 farm bill, even as passed by the House and Senate, may have trouble providing a meaningful safety net if and when the current price situation changes.”
Both the House and Senate passed farm bills that include some important improvements over current law, but provide an overall cut in funding for the farm safety net.
“Nearly every other title in the farm bill received a funding increase—with some receiving multiple billions of dollars in new funding—while the farm safety net experienced an overall cut,” said Shawn Holladay, a cotton farmer from LaMesa, Texas. “Given both the cuts we have already taken and today’s economic realities, the safety net agreed to in conference should not boil down to the lowest common denominator but instead reflect the best of both bills.”
Congressional leaders agreed to provide $10 billion in critically needed funding to help finance the farm bill given the sharply diminished budget baseline and the vast new needs requiring funding. This new funding, along with savings achieved from cuts to the commodity title and crop insurance, has been used to pay for nutrition, conservation, and other program increases.
“They need to be extremely careful how they handle crop insurance,” said Steve Kramer, a Hector, Minnesota corn and sugarbeet farmer. “Higher production costs mean far greater risks so bankers won’t even let us into the field without good insurance. Don’t mess up something that works.”
“I understand the percentage of total funding that goes to the safety net in the 2008 farm bill will probably only range from about 10 to 11 percent,” Tom Snodgrass, an Otoe County, Nebraska corn and soybean farmer, noted. “It seems to me there needs to be at least some “farm” left in the farm bill when all is said and done.”