Tuesday, February 21, 2012

The "Three Option" Program

From Farm Policy, Rep. Peterson predicts a 3 option program in the next farm bill:
“Rep. Peterson: Well, there will be. I think it’s going to be three options. I mean, I don’t see any other way to do this. There’s going to be the target price, kind of a cyclical component, there’s going to be some kind of shallow loss/catastrophic loss component, and there’s going to be a cotton program, the STAX program. And I don’t see any… I mean, rice and peanuts are the ones that are primarily interested in the target price. That brings them on board. And there might be some people out here that might use the target prices. The other commodity groups are more interested in the shallow loss/catastrophic loss.
But we just don’t have the money to do a one-size-fits-all program anymore. And frankly, the crops are different. I mean, the rice market, they don’t have ethanol, so they’re struggling. They don’t have access to Japan and a lot of these big rice consuming countries. They don’t have access. Now peanuts, they’ve got their own problems. Cotton, you know, the WTO case. So to try to fix all of them and have a program that’s going to work for cotton or for corn and soybeans and wheat, I just don’t see it, so I think there will be three options.”
He also says:
 "You know, I don’t know why we couldn’t even handle disaster through crop insurance, and I’ve talked to the crop insurance people about that. It would be a fairly efficient, I think, way to do it. So I think that’s where we’re heading, barring some big collapse in prices. But if we get back to a deal where corn prices go back down again significantly, corn and soybeans, then that could change the whole picture of things, and it could happen.”

 When I joined ASCS in 1968 there were separate titles of the farm bill for wheat, for feed grains, for upland cotton, and for producer rice and farm rice.  Over the years the programs gradually became more similar to the point they could be covered in one title.  Now it looks as if the commodity differences are  rearing their heads again.  Makes for more complex administration.

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