WICHITA, Kan. (DTN) -- Kansas farmers and agribusiness people offered a unified theme Thursday that crop insurance provides the strongest safety net and deserves more protection from federal budget cuts than other farm-bill programs such as direct payments.

A field hearing by the Senate Agriculture Committee in Wichita offered Chairwoman Debbie Stabenow, D-Mich., a chance to see drought's effects on Kansas farmers and hear people involved in Kansas agriculture offer their thoughts on what the next farm bill should offer farmers and ranchers. A hotel ballroom was packed with more than 400 people from across the state for the hearing that lasted more than three hours.

With a joint 12-member committee in Congress tasked with cutting $1.2 trillion in spending over 10 years, the House and Senate Agriculture Committees are now tasked with recommending places to cut. That likely accelerates possible changes in the next farm bill and keeps the target on programs such as direct payments.

"Agriculture remains a target with this new super committee," Stabenow said. Shortly after, she added, "The bottom line is, I think it's clear we in agriculture have to make some tough decisions or somebody else is going to make them."

Kansas agriculture also reflects the nature of this year's planting and growing season. Some areas will have good yields and high prices. But the state is now in the midst of drought that has crept up from the Southern Plains, killing even irrigated crops, while northeastern Kansas is dealing with flooding from the Missouri River. Agriculture Committee ranking member Pat Roberts, R-Kan., said the drought has caused $1.6 billion in losses, and that does not factor in losses from cotton or alfalfa production.

"So we are looking at about a $2 billion loss already, and unless we have a weather-pattern change, it is going to get rougher," Roberts said.

Steve Baccus, president of the Kansas Farm Bureau, said crop insurance cannot afford more cuts such as those made in the 2008 farm bill and the $6 billion cut over 10 years in the growth of crop-insurance expenses that was made last year. Baccus also defended the value of direct payments in providing stability for farmers facing disaster.

"That weather reality illustrates the need for continuation of direct payments used by producers to continue operations," Baccus said.

Yet, the Kansas Farm Bureau stated in written testimony, "If priorities must be declared, then a strong and viable crop insurance program will top our list. Viable risk management tools have become the most dependable resource producers can access to ensure a revenue stream and minimize the inherent risks that weather injects into a farming operation."

While advocating for crop insurance, farmers said they worry about yield declines in actual production history, or APH, because of repeated claims, particularly in a major disaster. Further, dealing with shallow losses not covered under crop insurance is a problem.

"As your crop declines from these severe droughts and extended droughts in Texas and western Kansas and all over, those decline your insured acreage," said Ken McCauley, a farmer from White Cloud, Kan., and former president of the National Corn Growers.

In his testimony, McCauley stressed the need to strengthen risk management, better linking crop insurance and ideally retooling the Average Crop Revenue Election program to better reflect more local growing conditions. He worked on ACRE in the last farm bill and said policymakers now need to learn and look for ways to make improvements.

"Risk management is not only important to the farmers," McCauley said. "It is important to rural communities. When you talk to the banker about an operating loan, he'll want to know what crop insurance coverage you have."

McCauley did note that if direct payments were cut, then Kansas farmers also would incur more risk in their farm operations.

Kent Goyen, a Kansas cotton grower, defended direct payments for the stability they provide to farmers. He added that it is critical to preserve as much of the baseline spending for direct payments as possible.

Greg Shelor, a farmer from Minneola, Kan., representing sorghum growers, acknowledged later that direct payments are hard to justify when farmers have a good crop and good prices. However, crop insurance doesn't cover all the expenses and direct payments help when going to the banker to discuss finances.

While farmers have often panned the Supplemental Revenue Assistance Program, or SURE, it does have its backers as well. David Schemm, a farmer from Sharon Springs, Kan., representing wheat growers, said SURE has worked as a life preserver in filling in the gaps from crop insurance. Schemm said he would like to see SURE become less complex and also see the payment process accelerated.

Jeff Whitham, chairman and CEO of Western State Bank in Garden City, Kan., told senators questions about crop insurance are often the center of conversation with farmers when it comes to financing. "The direct payment, I would tell you, is a little less effective because producers receive that payment whether they have a good year or a poor year."

Roberts, who is considered by many as the father of direct payments, said before the hearing that everything is on the table in terms of cuts. Later in the hearing, he told farmers he understood the message lawmakers needed to heed when looking at places to protect in the farm bill. "We have heard crop insurance about 100 times. We get the message. I hope we can bring that message back to Washington."

In addressing long-term challenges, Kansas Gov. Sam Brownback testified that the Ogallala aquifer is declining, which requires shifts in production and resources to retire irrigated acres.

"In some areas, we have got good saturated thickness. In other areas, it has declined to a point of not having the well production that can support the land it's irrigated on," Brownback said in an interview.

In a tweak to crop insurance, Brownback and Roberts both suggested championing a "limited irrigation" option. For now, a farmer either has insurance for dryland acres, or for applying a full appropriated irrigation level. Brownback said there should be a middle level for applying less water on the crop.

"We really need a middle option here," Brownback said.

Further, Brownback said more investment is needed to help develop lower-water-usage crops such as sorghum. Sorghum doesn't have the research investment behind it compared to crops such as corn. Yet, such work may be best done in a public-private partnership that could more quickly get drought-tolerant varieties into commercialization for farmers.

"What our guys need ... we need the varieties," Brownback said. "We need drought-tolerant varieties that use less water and we need it yesterday."

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

(ES/AG)

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