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The Southeast Sun - House Committee approves FARRM Bill

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"I don't know anyone who can grow only peanuts, all the time, and stay in business," said Ken Baker, who grows peanuts in the Wiregrass area. "The biggest culprit is the input price. The price of peanuts is staying the same and fuel is more than $3.50 a gallon."

Baker is not alone in his concerns regarding the rising cost of peanut production.
The cost of equipment, chemicals and maintenance on peanut farms are higher than ever.

It is this reason that U.S. Rep Martha Roby has helped revive the House Peanut Caucus to give the South and other peanut producing areas a unified voice to push for all the relevant issues related to peanuts while Congress drafts the 2012 Federal Agriculture Reform and Risk Management (FARRM) Bill.

The 2012 FARRM Bill will dictate agricultural policy for the next five years.

It has already passed the Senate and recently passed the House Agriculture Committee with a 35-11 vote.

In the past, farm bills have allocated government funds to provide crop insurance, price protection guarantees and even direct payments to farmers.
In the current economic times direct payments were one of the first things to go and the Senates version of the FARRM bill only included a revenue loss coverage plan for farmers, which, according to Roby's office, highly favors corn and soybean production.

"Direct payments for peanut farmers were a pretty good deal and we know that's going to be eliminated. That's our contribution for budget savings," said Randy Griggs, executive director of the Alabama Peanut Producers Association.
Revenue loss is based on monies that farms lose over an extended period of time and the members of the House Peanut Caucus feel that type of protection may not give peanut and cotton farmers enough of a safety net.

"Revenue loss coverage is based on how much the farm itself loses over the course of a year," said Jennifer Warren, Roby's legislative director. "It's fine for corn and soybeans, because they don't have price fluctuation."

According to Warren, corn and soybeans have a stable price because the federal government purchases a certain amount annually for ethanol production.

The House bill, which passed the agriculture committee on July 12, added a one-time choice for all farmers, which would allow them to forgo the revenue loss coverage plan and opt instead for a price protection plan.

"The price protection plan is a risk management tool that complements federal crop insurance," Warren said.

The floor price for peanuts is currently $495 a ton.

The House Ag committee's version increases that base price up to $535 a ton.

"If the price of peanuts per ton falls under $535 the farmer will get the difference for each ton sold," Warren said.

Opponents of such federal subsidies have claimed it's unfair to guarantee farmers a profit but Warren and Griggs agree the current bill won't come close to removing all of the risks from farming.

"There's a floor on the price, but it's not a floor that the famer would make money off of," Griggs said. "It keeps stability in the market when you have an over supply. It keeps it to where (buyers) can't offer you a ridiculously low price for your crop."

The House Agriculture Committee's proposed bill covered a lot more ground than just peanut legislation.

Combined with the Senate's bill, the two proposed plans for American agriculture have come at a lobbying cost of approximately $1 trillion.

The agriculture committee's bill still has to make its way through the House floor.

It's expected that House Democrats will try and stop the bill before it leaves the floor because of its proposed $16 million cuts to the food stamp program.

Other opponents of the bill say it will implement "soviet-style" supply controls on dairy products and other larger industries.

With less than two weeks left in the current legislative session the farm bill may have to compete for time against defense appropriation and other larger items on the docket, Warren said.

"If we don't pass a version of the bill by Sept. 30 at midnight we'll revert back to the 1942 FARRM Bill by default," Warren said. "We don't want to go back to 1942 policy. That was right after the dust bowl, it's not how we farm anymore."
Warren said that the some of kind of extension would more than likely be required before a version of the 2012 FARRM Bill goes into effect, and the resulting law will likely be some combination of both the Senate and House's proposed bill.

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