Des Moines Register
10-03-07
Brasher: Weathered N. Dakota brings up subsidy proposal
Farmers would not have to depend on Congress for temporary disaster relief.
WASHINGTON FARM REPORT
By PHILIP BRASHER
REGISTER WASHINGTON BUREAU
Washington, D.C. — The latest idea for subsidizing farmers comes out of North
Dakota, so it should be no surprise what it’s intended to do: Protect growers from
weather-related crop losses.
North Dakota has been the biggest recipient of agricultural disaster aid other than
Texas over the past decade. North Dakota has a shorter growing season than
many regions and unpredictable rainfall.
The new program, which will almost certainly be part of the Senate’s new farm
bill, would set up a permanent program for paying disaster payments.
It’s based on a plan developed by Roger Johnson, the North Dakota state
agriculture commissioner, a farmer who recently became president of the
National Association of State Departments of Agriculture.
Johnson, a farmer himself, has been working for several years to get the
organization to endorse a permanent program so that farmers no longer have to
depend on Congress for temporary disaster relief plans, which typically get
passed in election years.
The idea was to create a disaster-assistance program “that wouldn’t require
separate action by Congress every time there’s a disaster. There’s a disaster
every year some place,” Johnson said.
The organization agreed to a set of principles last year, and Johnson drafted the
program with a group of experts from the crop insurance industry, North Dakota
State University and the U.S. Agriculture Department.
And now, a North Dakota senator, Democrat Kent Conrad, is seeing that the
program gets written into the farm bill, using revenue to be raised by the Senate
Finance Committee. Conrad is a senior member of both that panel and the
Senate Agriculture Committee, which oversees the farm bill.
The program isn’t endorsed by USDA, even though department employees
helped with writing it. Johnson wouldn’t identify them.
Charles Conner, the acting agriculture secretary, has panned the proposal,
saying that it could undermine the federally subsidized crop insurance program.
“The message to the producers is, 'Don’t insure, because we have set up a
mechanism to literally pay you every year for disaster losses,’” Conner said in a
conference call with reporters.
“He is dead wrong,” Johnson said in response. He argues that the program will
actually encourage farmers to buy insurance.
To be eligible for disaster payments, a farmer will be required to carry crop
insurance where the coverage is available, and the size of the potential disaster
payments will be tied to the level of insurance coverage the farmer buys.
The higher the insurance coverage, the larger the disaster payment will be.
This feature kept crop insurance companies from opposing the program and
secured the support of the Senate Finance Committee’s top Republican, Sen.
Charles Grassley, R-Ia.
Iowa is home to several insurance companies, including Rain & Hail Inc. of
Johnston and Agro National LLC of Council Bluffs.
Another key feature of the program is that disaster payments would no longer be
tied to losses of an individual crop but instead to drops in a farm’s total projected
revenue, which will figure in commodity prices as well as production.
So, if a farm suffers a loss in one crop, say corn, but the soybeans did OK, the
grower may not qualify for a disaster payment. The farm is even less likely to
qualify if it has income from hogs or other livestock.
Pegging disaster payments to whole farm revenue could be especially beneficial
to states like, you guessed it, North Dakota, the nation’s No. 2 wheat producer.
When wheat yields are down, other crops are probably poor, too, said Chad
Hart, an economist at Iowa State University.
Johnson said the whole-farm approach will be better targeted to help farmers
who really need assistance.
In the end, there’s a good chance Congress will enact both a disaster program
and a crop-revenue protection program favored by corn growers in Iowa.
The latter program would provide payments to farmers when revenue for a
particular crop falls below a target level for a state or county.
The chairman of the House Agriculture Committee, Minnesota Democrat Collin
Peterson, said in an interview that Congress needs to try out both programs to
see how they work over the next five years.
That may be something North Dakota and Iowa can agree on.
Reporter Philip Brasher can be reached at (202) 906-8138 or
pbrasher@dmreg.com