30/10/13: Decoupling US farm incomes safety net from actual plantings urged

Hot-off-the-press from the National Grain & Feed Trade Association in the USA

As farm bill conferees convene today to begin the process of resolving differences between the House- and Senate-passed versions, the National Grain and Feed Association (NGFA) sent a letter to the conferees making recommendations regarding the commodity section and Conservation Reserve Program (CRP).

Concerning commodity programs, the NGFA urged congressional conferees to decouple farm income safety net programs from actual plantings.  The NGFA noted that historically, when government commodity programs encourage planting that is inconsistent with market demand, it negatively affects markets, international trade relationships and the agriculture industry as a whole.

The NGFA in particular warned that "linking any type of farm program income supports to actual plantings...could risk exposing the United States to potential trade challenges under the World Trade Organization." 

The NGFA also urged conferees to reduce further the CRP acreage cap, while retaining language in the House-passed bill that would allow certain non-environmentally sensitive land to exit the CRP before contract expiration without penalty.

Currently, the House-passed farm bill would reduce the existing 32-million-acre cap to 24 million acres, while the Senate version would lower it to 25 million acres - both through a gradual, stair-step approach over a period of years.

The NGFA noted that the most recent CRP general sign-up results reflect the continued trend toward increased planting of crops on land suitable for production in response to market demand.  If sign-ups remain steady over the next five years, the NGFA wrote, the resulting acres enrolled in the CRP would decline to less than 22 million acres.

Meanwhile, the penalty-free early out provision in the House-passed farm bill would allow CRP contract holders to terminate their contracts in fiscal year 2014, provided the land meets specified criteria and has been enrolled in CRP for at least the previous five years.

NGFA said its farm bill recommendations were designed to establish "a sound farm policy framework for agricultural producers, agribusinesses and the millions of Americans whose jobs depend on a vibrant and flourishing U.S. agriculture."

Established in 1896, the NGFA is a U.S.-based nonprofit trade association that consists of more than 1,050 companies from all sectors of the grain elevator, animal feed and feed ingredient, integrated livestock and poultry, grain processing, biofuels and exporting business.  

NGFA-member companies operate more than 7,000 facilities nationwide that handle more than 70 percent of U.S. grains and oilseeds. Affiliated with the NGFA are 26 state and regional grain, feed and agribusiness trade associations. The NGFA also has strategic alliances with the North American Export Grain Association and Pet Food Institute.