Farm Safety Net Proposal Better Protects Small Farms, Local Problems, NCGA Says (8-24-07)

As torrential rains washed across parts of Ohio while 90-degree temperatures baked other parts of the state, former National Corn Growers Association (NCGA) President Fred Yoder, whose own Ohio crop is doing well this year, reflected on 2005.

Two years ago, most of the nation was looking at another excellent harvest. Yoder wasn’t as lucky. “In my own area we had very, very poor yields and very low prices,” he recalls. “Of course loan deficiency payments (LDP) are based on production. Some of the areas of the country where they had great production, they got the great loan deficiency payment, and I basically didn’t get anything here. The safety net didn’t cover me.”

Yoder is enthusiastic about the proposed Farm Safety Net Improvement Act introduced by Sens. Richard Durbin of Illinois, and Sherrod Brown of Ohio. If the amendment to this year’s farm bill passes, for the first time corn growers would have a safety net that includes a revenue countercyclical program (RCCP).

NCGA believes RCCP is a better income safety net for farmers than the current patchwork of farm programs and ad hoc disaster relief. With its market-oriented payment, the bill will reduce the incentive to overproduce on marginal land and help reduce production distortions. Target prices and loan rates will adjust with the market, rather than being set by the political process.

“It keeps us farmers on the farm, because revenue pays the bills,” Yoder says. “When you base a safety net on revenue, you have the money to pay those bills where you can stay in business. To me it will also protect a smaller farmer because it makes everything a more even safety net.”

For more information about the Farm Safety Net Improvement Act click here.