Farm Policy Must Change with the Times
Des Moines Register, May 21, 2007

By Ken McCauley, President
and Ron Litterer, First Vice President
National Corn Growers Association

U.S. agriculture is changing, as is the taxpayer's perception of agriculture. The American public expects today's agricultural industry to capitalize on new uses and new markets while maintaining our role as the world's premier food producer.

The 2007 farm bill is generating discussion from coast to coast. But to quote former president Dwight D. Eisenhower, "Farming looks mighty easy when your plow is a pencil, and you're a thousand miles from the corn field."

To keep agriculture viable in the long term, corn growers recognize changes must be made to farm policy to ensure development of a safety net that would better protect producers against crop losses and volatile commodity prices. The National Corn Growers Association's National Farm Security Act offers a viable, innovative policy direction for the 2007 farm bill.Through its focus on farm-based revenue, we believe our organization's proposal is compatible with U.S. commitments in the World Trade Organization and would position the United States very well for future trade agreements. The proposed act is designed to increase the market orientation of U.S. agricultural policy and to enhance the targeting of farm support.

Our organization's proposals include: direct payments as currently provided; a revenue-based subsidy to compensate producers when there is a shortfall in a crop's county revenue; integrating the existing Federal Crop Insurance Program with the revenue-based subsidy; and changes in the Marketing Loan Program that would prevent crop prices from being artificially propped up. To ensure a more prudent use of public funds, the proposed act would cap projected commodity prices used to determine revenue guarantees.

The National Corn Gowers Association believes these changes to the current farm-support programs will protect both producers and taxpayers. Combining the revenue-based subsidy program with crop insurance provides a more effective and efficient safety net, minimizing the need for costly ad-hoc programs. Our proposed reforms also address the biggest hole in the current safety net - low yields in years of either low or high prices.

Some crop producers fear that today's higher crop prices will be short-lived. They want a safety net based on crop prices rather than revenues. We believe that system unfairly penalizes producers who suffer crop losses when prices are high, and unfairly benefits producers who have high crop yields when prices are low. We think producers are better protected when a crop's actual revenue per acre falls below the expected revenue per acre. After all, revenue pays the bills.

The proposal benefits taxpayers by ensuring prudent use of public funds. Furthermore, it is a realistic policy option under the current federal budget constraints. The National Corn Growers Association projects the annual cost of the proposed reforms at approximately equal to the level in the USDA's farm-bill proposal.

U.S. farm policy must be brought into the 21st century and protect the long-term interests of both farmers and taxpayers. It's essential that our nation's farm programs both reflect the demands of the marketplace and allow producers to adapt to them.