“The Commodity title, as it is currently written, will have a devastating impact on southern agriculture which relies heavily on irrigation and, therefore, benefits less from Crop Insurance,” said Boozman.
Crop insurance does not work for southern commodities in the same manner it does for producers in other regions. The safety net that it creates is geared to protecting producers of commodities in regions where yield risks are high. Many southern crops, including rice, do not fall into that category as they are heavily irrigated. As a result, the risk for southern producers is tilted heavily toward a collapse in commodity prices rather than on farm yield fluctuation. If a commodity’s price plummets while inputs like fertilizer or energy prices remain high, producers have no protection for the losses created by the high front-end costs.
During his speech, Boozman said the new revenue plan designed to augment crop insurance “leaves gaping holes in the Southern Safety Net.”
“Even with a reference price, this revenue plan may not be strong enough for our farmers to get operating loans. For example, most estimates find that Rice would lose as much as 70% of its baseline – far more than their fair share. However, this is not about just one crop. Every farmer in America knows the real threat of multi-year price declines, and we need a commodity title that treats all crops and regions fairly,” Boozman said.
Boozman is concerned that the version of the Farm Bill currently under consideration in the Senate creates a weak, inequitable safety net as a result of the risky assumptions it is based upon.
“I am very concerned that this proposal is couched in the assumption that we will continue to have these high commodity prices. A revenue plan is attractive when prices are high, but I am not sure there is anything in this plan that protects producers from a multi-year price decline and an untested, one-size-fits-all program, with no producer choice could leave many producers vulnerable,” Boozman said. “Throughout this process, I have said that anything that goes too far in any direction can violate the core principals of this effort. I am afraid that this Commodity title does that in its current form.
While Boozman opposes final passage of the bill in its current form, he expressed his commitment to working with his colleagues to get a Farm Bill that protects all crops and regions passed by Congress and signed into law this year.
“But just because we there isn’t full agreement, does not mean that our farmers stop needing a safety net. I am committed to continuing the fight for a safety net that works–not just for Arkansans–but for all farmers, of all crops, in all regions of the country,” Boozman said. “We can do this while preserving the safety net, making reforms, and achieving deficit reduction. I am confident that we can craft a bill that we are all proud of, and I look forward to continuing to work with the Chair, Ranking Member, and all the members of Congress and seeing this through.”
Tags: U.S. Senator, John Boozman, Farm Bill, Arkansas