Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Friday 05/10/13

A Comparison of Senate and House Target Price Proposals

One of the big differences that hung up last year's debate over the Senate and House versions of the farm bill was the lack of a target-price program in the Senate version. The House more than made up for that by not only keeping a target-price program, but boosting the overall reference prices for almost every commodity. In fact, some university analysis suggested under the House bill, most producers would be better off enrolling in the target-price program instead of the shallow-loss program meant to supplement crop insurance.

The Senate bill unveiled on Thursday did reinstall a new target-price program Adverse Market Payments. According to the text of the bill, almost all commodities would have the same AMP reference price as the current Counter Cyclical program target price, with exceptions for rice and peanuts, which would receive increase in their target prices.

Reference prices under AMP:

Barley, $2.63 per bushel

Corn, $2.63 per bushel

Grain sorghum, $2.63 per bushel

Peanuts, $523.77 per ton

Rice, $13.30 cwt

Soybeans, $6 per bushel

Wheat, $4.17 per bushel

National Farmers Union, in commenting on the bill, expressed concern about the low rates. Clearly, the program is meant to push most commodity producers into signing up for the shallow-loss program, the Agriculture Risk Coverage program, while attempting to make concessions to southerners who grow rice

Last year, the House bill renamed target prices as the Price Loss Coverage Program. Lawmakers are expected to keep the program and target prices the same as last year's bill. Those prices were all raised compared to the current counter-cyclical program.

Reference prices under PLC:

Barley, $4.95 per bushel

Corn, $3.70 per bushel

Grain sorghum, $3.95 per bushel

Peanuts, $535 per ton

Rice, $14 cwt

Soybeans, $8.40 per bushel

Wheat, $5.50 per bushel

(These numbers could be different in actual text language. We'll know for certain later on Friday.)

They Said It:

House Agriculture Committee ranking member Collin Peterson, D-Minn., on Wednesday said he is working with Rep. Steve King, R-Iowa, on language regarding King's interstate commerce amendment to last year's farm bill. The amendment would prohibit states from regulating the means of production over a particular farm product. That would include scrapping state laws on gestation crates, egg cages and food labeling. States would not be able to deny the trade of an agricultural product from another state based on its means of production. King argued that states should not be dictating terms for food and production practices approved by the FDA or USDA.

Peterson said, "I'm tired of being lobbied by all these egg people and everything going on. I think it's the best solution myself. I'm tired of these states doing this crap."

Peterson said he has talked with House Judiciary Committee Chairman Bob Goodlatte, R-Va., to seek to avoid jurisdiction issues. Goodlatte supports the provision, Peterson said.

On conservation compliance: Ag Secretary Tom Vilsack said he supports the agreement reached by various groups to tie conservation compliance to premium subsidy support for crop insurance. "When you do away with direct payments, you obviously do away with the ability to connect direct payments to compliance," Vilsack said Thursday. "What I think is being suggested is we go back to where we were prior to 1994, which was crop insurance was tied to compliance. That's reasonable to do that again, especially given the challenges of losing a billion and a half tons of top soil a year -- net. We still have a lot of work to do with conservation."

I can be found on Twitter @ChrisClaytonDTN

Posted at 7:00AM CDT 05/10/13 by Chris Clayton
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