National Farmers Union President Tom Buis is willing to see farm policy revert back to 1949 law rather than have Congress extend the current farm programs if a deal cannot be reached on a new farm bill.
Buis said there was growing frustration throughout rural America that there was not a new farm bill. Buis said he and Farmers Union are "unequivocally" supportive of getting a new farm bill soon.
"That would be the most prudent thing," Buis said.
Buis said the House and Senate should conclude their negotiations and send a bill to the president. Then leave it up to President Bush to either sign a bill or veto it.
"I see no other option other than passing a farm bill that really works for everyone," Buis said.
Farmers Union has played a key role in developing the 2008 farm bill. Buis worked with a group of senators to establish a $5 billion permanent disaster program, and he also negotiated the country-of-origin-labeling language now in both the House and Senate versions of the farm bill.
Farm programs right now are temporarily extended until March 15. Either a new bill must be done or Congress could pass another short-term extension of the 2002 farm bill. Another option would be to extend the farm bill for a year or two, though that would likely not garner enough votes to pass.
Buis said one of his fears is that lawmakers looking to prop up spending for food stamps, fruits and vegetables, conservation or energy programs would look to take more money away from the commodity programs. The coalition that passed the farm bill in the House got more money for various titles, including $5 billion more for nutrition spending, which some urban lawmakers will demand remain in any extension. The end result is the commodity programs would be further eroded, Buis said.
"Everyone is going to say 'You have got high commodity prices, just take it out of the commodity title,'" Buis said. "As I said earlier, you don't write a farm bill for the high-priced years. You write it for the year you need it."
A third option would be to do nothing and allow permanent law from 1949 to go into effect. Buis said that is becoming a more attractive option.
"I know permanent law is not perfect, but given the alternatives, if we get to that, I think that's the best bet moving forward," Buis said.
House Agriculture Committee Chairman Collin Peterson, D-Minn., said earlier this week he is willing to let the current extension expire March 15 and let permanent law go into effect if a deal cannot be reached.
The 1949 law would create much higher loan rates for certain commodities such as wheat, corn, sorghum, barley and cotton. Dairy price protections would be higher, too. That's because the 1949 law had provisions that created a formula giving commodity loans the same buying power levels that they had in the time frame from 1910 to 1914.
The corn safety net would go from a $1.95 loan rate to $4.12, still below current market prices, but more comparable to what perhaps should be the current safety net level to prevent a major price collapse, Buis said.
"I think Chairman Peterson is right on target that they are on par with where they should be," Buis said.
Some commodities would see soaring prices. Cotton, which has a current 52-cents-a-pound loan rate, would see the loan rate increase to $1.36 a pound, nearly double the current futures prices.
Because the 1949 law largely amounts to non-recourse loans, the 1949 provisions would mainly affect commodities at harvest, except for dairy, which would see prices rise to more than $28 per hundredweight, about $8 per hundredweight higher than current futures prices. Still, Chris Galen, a spokesman for the National Milk Producers Federation, said the milk producers are not looking at the benefits of going back to permanent law.
"Our position now is we want the conference committee to negotiate with the administration, or in other words, getting a bill that the president will sign," Galen said.
The 1949 law had no counter-cyclical program and no direct payments. At least 19 commodities now covered under farm programs also would not have those protections under permanent law. Those include rice, soybeans, sugar cane and sugar beets.DTNAg
