New cost-cutting farm bill proposal angers industry

By Laura Crowley

- Last updated on GMT

Related tags: United states department of agriculture, Agriculture

The American Soybean Association (ASA) argues that the new version
of the farm bill proposal announced yesterday is damaging
for soybean and corn farmers as well as biodiesel producers.

House Republicans Collin Peterson and Robert Goodlatte drew up the new suggestions, which applies stricter limits of farmer subsidies and slashes extra spending for farm programs and conservation over a 10-year period. However, the ASA criticizes the new amendments. The organization's president, John Hoffman, said: "It reverses the limited progress ASA achieved in the House bill to provide more equitable income support to soybean producers, and sufficient funding to make US biodiesel producers competitive with imported biodiesel." ​He added: "Worse yet, the plan makes changes to the loan deficiency payment program that dramatically weaken the income safety net and disadvantage soybean, corn and other feed grains, and wheat farmers compared to current law." ​ The general suggestions seem to have been taken on board and strongly considered by government officials, with the US Department of Agriculture (USDA) seeing it as a positive step forward. USDA secretary Ed Schafer and deputy secretary Chuck Conner said: "We believe this offer represents a package that is moving in a direction of a bill that the President would sign." ​While the USDA considers work still needs to be done to advance the proposals, it sees it as an important stepping stone. ​Schafer added: "We urge the House and Senate to use this proposal as the framework for a conference agreement. Without action sometime soon, we risk not reaching a final agreement that would provide a long-term safety net forAmerica's farmers and ranchers." ​ The amount of money the bill will save is stilly blurry, but according to the ASA, it cuts overall spending by $12bn from the earlier House-passed bill and inserts policy positions that had previously been rejected. Among the changes is a $6.5bn cut from the Commodities Title, which provides income support for wheat, feed grains, upland cotton, rice, and oilseeds. Other cuts include $3bn less in increased food stamp spending and $2.2 billion less in the Energy Title. Funding for the Commodity Credit Corporation Bioenergy Program (which makes payments to eligible bioenergy producers to encourage increased purchases of agricultural commodities for the purpose of expanding production of bioenergy) including support for domestic biodiesel production, would be reduced from $1.4 bn to $245m. The plan also would require producers of all commodities, with the exception of cotton and rice, to lose beneficial interest in their crops in order to receive a Marketing Loan Gain or Loan Deficiency Payment (LDP), according to the ASA. Hoffman said: "Requiring producers to sell their crop in order to receive anLDPwould end the effectiveness of this program in protecting farm income during periods of low prices. While the income safety net provided by theLDPprogram is not triggered during times of normal or high prices, gutting the effectiveness of this program during potential future times of low prices represents a major step backward from current law.​" This new proposal follows the House's version of the bill being passed last July, and the Senate's, which was passed in December.

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