Wheat Leader Pleased with Farm Billby Scott A. Yates
Capital Press, May 3, 2002
Growers got 80 percent of what they wanted, Coppock says
SPOKANE, Wash. -- Daren Coppock spoke for thousands of the nation's wheat growers when he said of the 2002 farm bill: "Whew! It's finally over."
Coppock, chief executive officer of the National Association of Wheat Growers, however, was just as pleased with what was in the bill as the fact its tortuous two-year journey from proposal to law is almost complete. It still had to be approved by both houses of Congress, with a vote possible May 2, and signed by the president.
Although the Food Security and Rural Investment Act of 2002 includes planting alternatives that came with the so-called Freedom to Farm Act of 1996, it also brings back agricultural provisions of an earlier era, specifically target prices. Conferees assigned a target price for wheat starting at $3.86 a bushel for 2002 and 2003 rising to $3.92 in 2004 through 2007. NAWG had originally proposed a $4.25 target price. The target price is basically what the government guarantees growers will receive for their wheat.
As part of the package, wheat growers will receive a 52-cent fixed per-bushel payment that will not decline over the life of the bill. NAWG originally proposed a 64-cent direct payment.
The loan rate for wheat has been set at $2.80 a bushel the first two years. It will decline to $2.75 per bushel in 2004 to 2007. The current national average loan rate is $2.58.
"We were pretty pleased with what came out," he said. "You take the $3.92 and subtract from that the market price, or loan rate, whichever is higher, the direct payment, your LDPs (loan deficiency program payments) and if there is still a shorfall, then it triggers the countercyclical payment to make up the difference."
The compromise package increases commodity program spending by $48.6 billion to about $120 billion. Total farm bill spending is projected at $171 billion over 10 years.
Jack Silzel, agricultural aide to Rep. George Nethercutt, R-Spokane, said the bill still has the basic concept of Freedom to Farm: Farmers still have the flexibility and freedom to grow what they want.
But the world has changed. Especially since Sept. 11, Silzel said, his boss considers food a security issue. Weighing the competing interests in the world, Freedom to farm is a scenario you can't have in the truest sense, he said.
Gary Broyles, president of NAWG, said the conference committee compromise was appropriated and hopes the full Senate and House pass it quickly and send it to the president.
"It is past time we get this process finished up so agriculture knows what to count on. We need to get on with life. There's a lot of other issues we need to be spending our effort on." he said.
Coppock estimated that wheat growers got about 80 percent of what they wanted. The House bill was closer to NAWG's position and on some of the more contentious issues its members appeared to prevail. But the Senate raised loan rates and succeeded in lowering payment limitations.
On that issue, there is now a $375,000 payment cap, but the three-entity rule is still in place. Coppock said the structure of payment caps works this way: $40,000 in fixed payment, $65,000 in countercyclical payments and $75,000 for marketing loan gains or Loan Deficiency Program payments.
Conservation Reserve Program payments fall outside of these limits. That program has been increased to 39.2 million acres from 36.4 million acres. Only 33.4 million acres currently are enrolled in the program, so about 6 million acres can be added given the new total.
Eric Odberg, president of the Idaho Grain Producers Association, said he was pleased the process was completed before the start of a new fiscal year when available money might have been a more critical issue. Although he wasn't thrilled with the compromises on support payments, he figures farmers will wind up receiving as much as they did with the emergency spending during the last four years.
Growers of commodities like corn and soybeans pushed for an update of yields and base acres where increases will benefit them. The wheat industry was not in favor to that provision, Odberg said. As a result, the updating is voluntary and growers have three options to choose from.
Steve Johnson, executive director of the Idaho Grain Producers, suggested that $2.80 loan rate for wheat will affect world prices. NAWG opposed increasing that if will simply allow competitors to undercut the market while getting more for their grain.
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