Farm Bill Talks Starting Again

October 30, 2013

As formal talks open Wednesday, farm bill negotiators are looking at new alternatives to better align the House and Senate commodity titles and reduce the cost of rival revenue insurance plans to protect against shallow losses.

An anticipated meeting between President Barack Obama and the top four leaders of the House and Senate Agriculture Committees has been put off because of an apparent scheduling conflict.

But the White House signaled it will still pursue discussions to underscore Obama’s commitment to completing a farm bill before January.

Most public attention has focused on the deep divide over food stamp funding. But the commodity title is its own battleground.

Trying to break the ice, the House has shown a willingness to scale back the subsidy rate for its new Supplemental Coverage Option (SCO) while increasing the minimum deductible from 10 percent to 15 percent. Under this approach, the same 15 percent deductible rule would apply as well to the Senate’s favored initiative — Agricultural Risk Coverage (ARC) — which is now triggered after losses of just 12 percent.

No decisions have been made at this stage. But the choices illustrate the challenges for lawmakers as they try to craft a new safety net to replace the current system of direct cash payments that will be ended under both bills.

The Senate is much more driven by corn and soybean interests allied with Midwest Republicans and its bill invests most heavily in ARC which favors these crops. In fact, corn and soybean farmers already buy substantial revenue insurance at coverage levels of 75 percent to 85 percent and the added ARC payment would overlap in some cases and add to their profits.

The House measure reflects more Southern agriculture and the mindset of its Agriculture Committee Chairman Frank Lucas (R-Okla.), whose own farming history makes him more sensitive to real market failures — not just shallow revenue losses.

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