Farmers say risk management program too complex
SIOUX FALLS, S.D. — Farmers told a U.S. House committee Tuesday that a crop risk management program introduced in the 2008 farm bill is a good tool but it's way too complex.
The Average Crop Revenue Election program provides revenue support as an alternative to the price support that farmers are used to receiving from commodity programs. If a state's revenue falls below the guarantee, farmers who signed up for ACRE could receive payments.
Rod Gangwish, who grows corn and soybean near Shelton, Neb., was one of several growers to testify before the House Committee on Agriculture during a field hearing on the next federal farm bill.
Gangwish said ACRE covers the systemic loss incurred in case of low price or widespread low production, but it has its drawbacks.
"I do not like the way the ACRE program triggers, with respect to state averages as compared to our farm," Gangwish said.
Twelve committee members, including Chairman Collin Peterson from Minnesota, Rep. Stephanie Herseth Sandlin from South Dakota and Rep. Bob Goodlatte from Virginia, listened to testimony from two panels Tuesday at Augustana College in Sioux Falls.
Herseth Sandlin suggested that lawmakers look at tweaking the ACRE program to base revenue numbers on a county or local basis, an idea that was well received by growers on the panel.
Gary Duffy, an Oldham farmer who serves as president of the South Dakota Corn Growers Association, said another challenge with ACRE is that the landlord has to agree to it and enroll in the program for five years.
The current $284 billion bill, approved in 2008, expires in September 2012, and members of the House Agriculture Committee hope to avoid disagreements that delayed passage last time.
About 75 percent of the bill's funding goes toward food nutrition programs, such as food stamps, but it also supports commodity crops, horticulture, livestock, conservation, trade, agricultural research, farm credit, rural development, energy and forestry.
Doug Sombke, a farmer from Conde, said the best way to get the economy going is invest in America's farmers and ranchers.
"You put money into agriculture, agriculture pays it back," Sombke said.
One way to support U.S. farmers is to help them access world markets, said Scott VanderWal, a corn and soybean farmer from Volga.
VanderWal said a good start would be to enact free-trade agreements South Korea, Columbia and Panama, three countries that continue to sign agreements with competitors.
"We're no longer standing still in ag exports across the world," he said. "We're going backwards."
Matthew Wolle, a corn and soybean farmer from Madelia, Minn., said young growers face added challenges as most lenders don't want to loan money to beginning farmers and ranchers.
He suggested a fundamental shift to make the U.S. Department of Agriculture a lender farmers go to first instead of a lender of last resort.
"We need a next generation of farmers," Wolle said.
The hearing's second panel dealt with biofuels, woody biomass and research.
Duffy said biotechnology holds great promise for farmers and consumers, but producing more food will require more advances and wider use of existing genetically enhanced foods.
"Further advancements in biotechnology are necessary to ensure the world can continue to rely on U.S. growers to provide high quality food, feed, fiber and fuel," Duffy said.
Scott Weishaar, vice president of commercial development for Sioux Falls ethanol producer Poet, said the nation has barely tapped the potential of both cellulosic and corn-based ethanol.
Weishaar said corn yields have doubled over the past 50 years to more than 160 bushels per acre, and they're expected to double again over the next 20 years to generate an additional 13 billion bushels of corn.
"Ethanol is the only growing market for that additional supply of corn," he said.
Weishaar asked lawmakers to increase the base blend of ethanol from 10 percent to 15 percent, mandate that all new vehicles run on E-85, an 85-percent gas-ethanol blend, and provide incentives for blender bumps that allow for variable percentages.
U.S. House Committee on Agriculture: http://agriculture.house.gov