Senators: No Farm Bill Cuts

WASHINGTON (DTN) -- As they heard testimony from economists on the problems in farm country, leaders of the Senate Agriculture said Thursday there should no more cuts to farm bill programs.

Committee Chairman Pat Roberts, R-Kan., and ranking member Debbie Stabenow, D-Mich., made the statements two days after President Donald Trump's budget called for massive cuts in money and personnel over the next 10 years.

At what he described as the first farm-bill hearing in Washington, Roberts acknowledged that the national debt is approaching $20 trillion, but he said that, between the savings from the last farm bill and a USDA crop insurance contract negotiation, "Everyone on this committee agrees that ag has already given at the store."

Whoever negotiated the contract cut to crop insurance on top of the farm bill cut had "some relationship with Lizzie Borden," Roberts said, departing from his prepared remarks. "Farmers, ranchers, and rural families understand fiscal responsibility. But, now is not the time for additional cuts. We need to review what is working and what is not working."

"We need to ensure that producers have risk management tools at their disposal. Let me emphasize that crop insurance is the most valuable tool in the risk management toolbox," Roberts said twice -- and then repeated the statement a third time at the request of Sen. Heidi Heitkamp, D-N.D., and Sen. Luther Strange, R-Ala., the newest member of the committee.

In a statement apparently intended for farm lobbyists as well as committee members, Roberts also said, "We need a farm bill that meets the needs of producers across all regions and all crops. The challenges are so great, given the critical times we live in, it is essential that small differences do not get in the way of the larger goal -- to pass a farm bill."

Stabenow focused more directly on the Trump budget. Through the 2014 farm bill, "the Agriculture Department has made historic, targeted investments in rural communities to spur jobs and opportunity over the last several years. As a result, we're beginning to see small towns across our country on the road to recovery," she said.

But, Stabenow continued, "There is much more to do for these communities -- which is why it's deeply troubling that this administration has proposed sharp budget cuts that would roll back a lot of the progress we've seen." The Trump budget, she said, "cuts $231 billion from farm bill programs, which would make a five-year farm bill virtually impossible to pass.

"It cuts crop insurance by $29 billion, which would take away a crucial part of the farm safety net at a time when it's needed most," Stabenow continued. "The budget also calls for sharp cuts to the family safety net, gutting SNAP by nearly 30%. Proposed closings of USDA offices would reduce customer service for our agricultural producers, and make their tough jobs even harder. Elimination of specialty crop and market access programs weaken our farmers' ability to recover from price slumps or pest and disease issues."

Stabenow said she was pleased that Agriculture Secretary Sonny Perdue intends to create an undersecretary for trade and foreign agricultural affairs, but is not pleased that the reorganization proposal includes elimination of the undersecretary for rural development.

"The combination of devastating budget cuts to critical services and the planned elimination of the undersecretary for rural development sends a powerful message that this White House is not concerned with the needs of America's small towns and rural communities," she said.

USDA Chief Economist Robert Johansson and Nathan Kauffman, assistant vice president, economist and Omaha branch executive of the Federal Reserve Bank of Kansas City, testified that conditions among farmers and ranchers continue to worsen, but that conditions are not as bad as in the 1980s.

Sen. Charles Grassley, R-Iowa, asked if farm land values have stayed high because outside investors are buying land. Johansson said that values have held steady first because about 50% of farm land is rented, and land rental contracts are multiyear and therefore not subject to immediate renegotiation.

Farm and ranch land rents are "sticky," Johansson said.

There is some "institutional investment" in land, Johansson added, but not much farmland comes on the market, and when it does, there are producers who want to buy it.

Kauffman added that it is important "to recognize the scale of wealth generated" when commodity prices were high and that farmers and ranchers have "limited alternative investments." Little land has come on the market, he noted, because there have been very few "forced liquidations."

Heitkamp said it would be helpful to lawmakers to know how much farmland is owned by operators and that she believes in North Dakota it is only 25%. Local owners realize that farm land rents should "fluctuate" with commodity prices, but if the owners live far away, they may have the attitude of a New York apartment owner who would not expect rents to go down at any time.

Alec Sheffer, director of retail sales for Agri-AFC in Montgomery, Alabama, who testified on behalf of the Agricultural Retailers Association, said farm retail suppliers have been hit hard by the downturn in the agricultural economy over the past decade. But he said retailers "are confident these winds are beginning to shift. We believe Congress will make changes in the upcoming farm bill to help strengthen the safety net provided by crop insurance programs and assist in improving conservation efforts."

Sheffer also said Congress should be careful to help agriculture in tax reform and that he expects the Trump administration to address regulations.

(CC/AG)

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