WASHINGTON (DTN) -- The American Farm Bureau Federation got a second chance to argue its case on the direction of farm programs when the supercommittee failed to get a deal done in November.

Farm Bureau's position went largely against the grain, as commodity groups offered up a mix of proposals under which crop insurance covered the bulk of risk for farmers, but the federal government would step in and cover the shallow revenue losses of 5% to 15%. Farm Bureau found itself largely on the outside of the talks among various farm groups and principal leaders of the House and Senate Agriculture Committee.

"There is no question that the supercommittee process that the agriculture committees were trying to work through highlighted the issues out there by commodity group, by region and since there wasn't resolution to that, those issues are on everybody's mind," Farm Bureau President Bob Stallman said in an interview with DTN in early December.

Now, Farm Bureau opens 2012 with its convention and an opportunity for its delegates to affirm or rewrite its own policies on the commodity title. Last year, Farm Bureau members largely affirmed their support for the current farm program mix, outside of not supporting the disaster program -- the Supplemental Revenue program, or SURE.

Traditionally, farm programs help farmers with the catastrophic or "deep losses" and farmers buy crop insurance to cover losses for commercial-size producers. Farm Bureau leaders argue that the federal government should help with the steep losses with crop insurance also playing a role in a producer's own risk management. But producers should manage the shallow losses.

Mary Kay Thatcher, Farm Bureau's farm bill policy expert, said on a Farm Bureau podcast that the group also has concerns over a draft of the commodity title that would create three separate farm programs. There is the shallow-loss program, a program with higher target prices, and then there is the cotton crop-insurance program, the "Stacked Income Protection Plan," or STAX.

"I just don't think there is an economist in the country that is good enough at this that they can make sure we are getting equity between three types of programs," Thatcher said. "And if we don't, then we will have farmers out there producing for the government again instead of the signals being sent by the marketplace."

Farm Bureau has argued the government should be there to help with the deep, more costly crop financial losses rather than the frequent shallow losses. Farm Bureau also believes the changes being planned set target prices too high, which would lead farmers to produce that particular crop over others.

"We also believe that if they would (move) toward some sort of deep revenue loss rather than a shallow loss, that that makes a lot more sense," Thatcher said. "And it's a program that can be provided not just to corn, wheat, soybeans, cotton and rice, but also to producers of fruits and vegetables. So it sort of levels the playing field amongst different products."

Farm Bureau released a proposal in late October to address plans offered by commodity organizations looking to protect farmers against shallow losses. Under Farm Bureau's plan -- called the Systematic Risk Reduction Program -- a farmer would be able to buy a second insurance plan that would function on a county or regional basis, depending on the ability of USDA to provide strong yield data in the area. Farmers would buy this SRRP coverage to coincide with their current insurance policy. In order to prevent double dipping, the insurance plans would pay out on the county or regional level first, then on the farm level to provide more effective coverage at 70% to 90% levels, depending on what a farmer buys. If a farmer chooses SRRP, it would replace direct and counter-cyclical payments, as well as ACRE.

Stallman said Farm Bureau has maintained its proposal and supported it because there was a lot of speculation that the supercommittee process wouldn't be successful. "So unless the delegates tell us different we're going to pursue that," he said. "We're going to do some further analysis and some tweaking. When you are talking about a proposed policy that is going to hopefully work the best possible under the budget environment we are going to be in for the largest number of agricultural producers, we need to do as much work on it as we can to get it right. Fortunately, now we have the luxury of time."

Craig Cox, a vice president of the Environmental Working Group, actually concurs with some of Farm Bureau's criticism of the commodity-programs proposed for the supercommittee. "We probably share their concerns about raising target prices so much and the distributions there that could occur."

Cox said there is little debate about the public benefit, particularly when there are no efforts to tie crop insurance with conservation compliance, and especially if farmers would rely more heavily on crop insurance. It's unclear whether Farm Bureau will take up that mantle. Delegates in at least one state, Iowa, considered tying crop insurance to conservation compliance, but rejected it.

ALOHA MIDWEST FARMERS!

Farm Bureau goes into its convention in Honolulu on Jan. 9 with a heavy emphasis on examining all of the farm programs and titles. Strong farm incomes and land values have made a lot of news. And, well, simply put, thousands of farmers facing good economic times will be in Hawaii to talk about the value to the taxpayer of the farmer safety net.

It's a sensitive issue, always.

"We have to book these meetings five to seven years out and I'm always praying when this meeting comes around that the farm economy is pretty good when we go out there," Stallman said. "So at least you can't do the number that all the farmers are going broke here and there's the big ag organization meeting out in Hawaii. Fortunately, this year the ag economy is pretty good. I lucked out."

The group also walks a line between having too much fun and being too formal. After critics lashed out over the Hawaiian venue in the 1980s farm crisis, the group gained a reputation for being too formal in recent conventions. This year, the group is trying to hit a business-casual mindset.

"Apparently now we have the reputation with the Honolulu convention bureau or whatever as the only meeting, the only conference that ever came to that town and wore business dress," Stallman said. "So we are going to say we want you to dress professionally, but you don't have to wear a tie."

Stallman added, "We're not going to be wearing flowery shirts and shorts with a little umbrella cap drinking. You guys have way too many cameras for that."

Chris Clayton can be reached at chris.clayton@telventdtn.com

(CZ/SK)

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