The 2007 farm bill debate will start heating up after the November elections as the new Congress starts debating the measure in earnest next session. Farm groups are putting together their ideas for a new farm bill - although some are calling for an extension of the existing program. Late last week the National Corn Growers Association Policy Action Team presented an alternative set of farm programs that could replace the current set of programs.
Their approach includes maintaining current calculation methods for direct payments; changing the non-recourse loan program to a recourse loan program; creation of a new program that includes Base Revenue Protection; and modification of the current countercyclical program into a revenue countercyclical program. The overall objective of the new programs is to "better stabilize farm income for producers of all program crops," according to the organization.
The BRP would be an improved farm-level safety net program for corn farmers. Payments would be triggered with net farm corn revenue falls more than 30% below the previous five-year average of per-acre net corn income on the farm. Per-acre net revenue would be based on farm yields, a national price and regional variable cost estimates. The program is also designed to allow the United States to report BRP payments to the World Trade Organization as green box support.
RCCP would change the current countercyclical program by replacing the price trigger with a revenue trigger. Payments to farmers would be triggered whenever actual per-acre country revenue - defined as a product of the National Agricultural Statistics Service season average price and the NASS county average yield - falls below the county revenue trigger. That trigger is defined as the product of the current effective target price and the county trend yield. RCCP and BRP work together to offer a revenue-based safety net to corn farmers, the organization notes.
To avoid duplication of coverage and to increase the efficiency of program dollars, the maximum per-acre RCCP payment would equal 30% of the county trigger revenue level. BRP coverage is designed to cover losses in excess of the 30% level.
The NCGA position paper outlining these programs took a look at representative farms and how the new programs would impact farm payments. While in some cases a farm might get more money under the current program, overall this new approach provides a more stable income base.