Sen. Tim Johnson said Tuesday he hopes a five-year farm bill emerges during the upcoming lameduck session of Congress.
The Senate passed a farm bill with strong support from both Republicans and Democrats in June, and both Johnson, a South Dakota Democrat, and Sen. John Thune, R-S.D., voted for it. But it stalled in the House, and no bill has emerged from that body as the end of the year approaches.
"I can encourage the House to take up the farm bill as soon as possible," Johnson said during a meeting in Huron with farmers and others with ties to agriculture. "The House should pass something similar to the Senate bill."
He said a six-month or one-year extension of the bill is an option, but the best solution would be for the House to pass it during this shortened session, and then have the two versions forged into one during a conference committee before President Obama can sign it into law.
"I can't understand why they won't pass a bill," Johnson said of the House.
The five-year, Senate-passed farm bill provides producers with long-term certainty, he said. It strengthens crop insurance, reauthorizes livestock disaster assistance and ends direct payments. It reduces the deficit by $23 billion over 10 years.
Direct payments, which were added to the farm bill in 1996 after other price supports were dropped, provide money to farmers for not planting, no matter what the price for the crops is at the time. The payments help keep supply down and prices up. The direct payments targeted for termination are distinct from payments made as part of conservation programs.
With record prices for corn, and farmers reporting bulging bins and wallets, there has been a growing call for an end to the payments, and a reliance on crop insurance that is payable only when crops fail.
In 2011, according to the U.S. Agriculture Department, farmers received about $10.6 billion in direct payments. That's 10 percent of the record net cash income of $108.7 billion for the farm industry.
Some Midwest farmers welcome the end of direct payments, which will also mean restrictions on what can be planted and harvested will be lifted. However, many southern producers say crop insurance will not provide enough of a safety net for them, and want the direct payments retained.
Now, since the last farm bill expired at the end of September, livestock disaster assistance programs have expired. No new Conservation Reserve Program, Grasslands Reserve Program, or Wetlands Reserve Program contracts can be issued.
Johnson said the Senate version of the bill dropped direct payments to guarantee crop insurance remained strong and viable.
"It's a pretty good farm bill to make that tradeoff," he said. "But those in the House of Representatives are giving us a hard time about it. They don't have a farm bill of their own yet. Speaker (John) Boehner said they will have a hard time getting the votes for a farm bill. But hope remains eternal."
Johnson met with representatives of the South Dakota Farmers Union at the Crossroads Hotel in Huron. Farmers and people with ties to agriculture attended the meeting and offered comments during a roundtable discussion with Johnson. He asked questions of them and then offered his view on how things may play out in Washington, D.C.
"There's quite a bit of uncertainty out there with no farm bill," said Gerald Bischoff, a rural Huron farmer.
"You sit and wonder why something like this can't happen, as important as ag is to our country," said Justin Wipf, who raises corn and wheat on a family farm outside of Huron.
Neal Hegg, a Huron banker who is also a farmer, said fiscal elements in the farm bill are a concern for him.
South Dakota Farmers Union Insurance Agency Regional Manager Wayne Bartscher said the loss of crop insurance is a major concern. While it's authorized through 2014, the lack of a farm bill has people nervous.
"One of our biggest concerns on crop insurance is making sure that safety net is secure," Bartscher said.
He said his agency "wrote a lot of big checks" to producers this year as drought and dry conditions led to widespread crop failures. Without that insurance, farmers and ranchers would have missed payments, and some would have likely been forced out of business, he said.
Hegg agreed, saying without crop insurance, it would be "impossible" for some producers to obtain loans to operate their businesses.
Fran Fritz, of Iroquois, is a cow/calf operator, the supervisor of the Beadle County Conservation District and president of the State Association of Conservation Districts. The districts make a great deal of their money planting trees, which is paid for by both the landowners and through federal funds that are part of the farm bill.
Fritz, like others at the meeting, had high praise for the PBS documentary "The Dust Bowl," which aired Sunday and Monday, and said it reminded her of the need for proper conservation.
"I've known that for a long time, I've known planting trees and other conservation practices were vital for the state, but when you see the black and white of the documentary, it brings it home," she said.
"It was profoundly important," Johnson said of the two-part show, produced by awardwinning documentarian Ken Burns.
Joel Keierleber, of Colome, said it evoked memories of difficult, dusty times in South Dakota.
"I can really see where our conservation programs really helped," Keierleber said. "These programs really benefit the public, and not just the farmers."
Fritz said although many people feel agriculture is booming in the state, she feels rising costs for feed and other expenses, as well as property taxes, make it a challenge.
While cattle prices are strong, feed costs and other expenses make it difficult to clear a profit, she said.
She owns 750 acres and said her taxes topped $8,000 this year. That is a concern for her.
"This calf has a heck of a lot on it," she said, referring to the calves she raises to sell. "It's got to pay for mama, it's got to pay for the bulls I hire, and it's got to cover my living, because I like to eat, too.
"We'll be OK. I want the farm bill," she said. "We need the continuity. It will happen."
Keierleber said as costs rise, and there is less available feed on farms and ranches to feed cattle, there is a growing move to sell. Cattle herds are being culled, or reduced as the weaker animals are sold, he said. That will continue as the drought forces producers to buy more feed for their animals.
"As you get west, there's going to be a huge number," he said.
Johnson said he's unsure what will happen with the estate tax, which most Republicans want to end, while many Democrats want to retain a 35 percent tax on estates over $5 million. President Obama favors a 45 percent rate on estates over $3.5 million.
"We need permanence in the estate tax, whatever it is," Johnson said. "I need to see what our options are before we have a final decision. Somewhere in the middle is where I want to lay down."
Johnson said the production tax credit for the wind industry should survive.
"I am optimistic about this particular tax credit," he said. "It remains to be seen if we do it in the coming months or we wait until the last at-bat. There are 22 tax credit bills waiting for the final passage."
Johnson said he was pleased to see corn producers, who have relied on ethanol production to boost their sales, are not having a great deal of conflict with those who raise cattle and have to buy corn and grain that has gone up in price. He said he expected to hear of a greater divide between the two.
Johnson was presented with the Golden Triangle Award, the highest award handed out by the Farmers Union. It's the 16th time he's received it during his 26 years in Congress.
Distributed by MCT Information Services
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