What is in this article?:
- Southern agricultural layers peeled back at farm bill hearing
- Finance, cattle feed and means testing
- Labor, aquaculture and rice
- The House Agriculture Committee left northeast Arkansas with a better understanding of the unique intricacies of Southern agriculture, following a farm bill hearing.
Finance, cattle feed and means testing
Indiana Rep. Marlin Stutzman, a fourth-generation farmer, shifted the focus to finance. “I remember going into the bank with my father. I always hated sitting on the farmer’s side of desk. I always wanted to be on the banker’s side. Well today, I’d rather be on the farmer’s side – the bankers have kind of taken it on the chin, lately.
“Has credit availability changed for you? Your experiences with access to credit? What do you see with your neighbors in your communities?”
Tim Burch, cotton and peanut producer from Newton, Georgia, said financial backing is increasingly difficult to secure. “In my area, much like I’m sure it is around the United States, people who don’t need to borrow have ready access to money. The people that need it have trouble getting it. It just depends on your collateral situation. It’s very tight for people with marginal operations.”
Flowers, a board member at a bank, agreed. “We’d like to see some kind of crop insurance farmers in our area can afford and take advantage of. The banks want to make sure they have pretty good collateral.
“Our problem is we don’t have the deep losses. But the losses between ‘the deep’ and what it actually costs to produce is where we have our problems.”
Oklahoma Rep. Frank Lucas, committee chairman, asked Flowers about reports that banks are requiring farmers have much more documentation “to prove you’re covering all your bases. Is that your observation?”
Flowers: “That is a definite. We’re going through more and more rigorous examinations at the bank.
“The first thing we look at is what the direct payments are, what crops have already been sold, and what kind of insurance you have.”
Lucas: “It doesn’t necessarily matter how great your record is and how much confidence your banker has in you?”
Flowers: “That’s correct. The days of just knowing who you’re dealing with are over. You’ve (now) got to have everything documented, every ‘i’ dotted and ‘t’ crossed.”
Crop insurance was at the center of Lucas’ questions to John Owen, a row-crop farmer from Rayville, Louisiana.
“The main problem with using crop insurance as the sole basis for risk management is that it can’t protect you against a multi-year low price scenario such as we experienced in the late 1990s,” said Owens.
“The indemnities for crop insurance, or the triggers, are set in the winter and are generally based off the Chicago Board of Trade futures. When those prices are low, you have a product that provides no protection from the beginning.
“So, without an underlying reference price – either counter-cyclical or through a revenue-assurance policy through the government that is economically viable – crop insurance isn’t a long-term safety net for agriculture in the Mid-South; or, as far as I can see, anywhere in the country.”
In his testimony, Dan Stewart, a cow/calf producer from Mountain View, Ark., linked high feed prices to biofuels – something the renewable energy industry refutes. During the question-and-answer portion of the hearing, he said such industry claims “are hard to believe. … At first, they were talking about distillers grain (for feed). We haven’t been able to utilize that as a feed source like we were once led to believe.”
Texas Rep. Randy Neugebauer pointed out that David Hundley, a rice, corn and soybean farmer from Jonesboro, had spoken out against means testing for farm program eligibility. “A lot of folks are opposed to large farming operations receiving farm payments. I think in your testimony you said it would be ‘detrimental to family farms in Arkansas.’
Means testing “in itself,” said Hundley “is almost a failed attempt to regulate a failed policy. The safety net we need (should) be available to every farm and every acre regardless of the size of” the operation.
Lawmakers, said Neugebauer, are faced with prioritizing, with “making choices … dealing with a smaller amount of funds to put together a good, comprehensive farm policy.” He asked Owen “the most important farm program that exists today? (The one) we should work really hard to preserve?”
“By far” the counter-cyclical program is “the most important and most dependable” replied Owen. “Having a meaningful reference price we can take to a bank for finance, having a loan program we can use to aid our marketing is the most important.
“We need price protection and we need yield protection. The price protection has to come from a counter-cyclical-type program. Yield protection could come from insurance.”
Stewart, asked about the biggest challenges for cow/calf producers, said “regardless of whether you attribute it to global warming, weather cycles, or whatever, our weather seems to be in a system of extremes. In our area, we can have massive floods all spring. Then, summer gets here and we don’t get another drop (of rain) until the next winter. That’s one of the biggest challenges as far as forage production.
“Like most farmers and ranchers, we like to look ahead and plan, sometimes, for the worse. There are environmental issues that possibly be out there – like the (EPA regulating) dust. They say that is just a myth but it concerns a lot of farmers. I’d like to see some assurances that it will not affect us.”
Owen also expressed displeasure with the EPA and advocated it being “reined in. We’re excellent stewards of the land and I’d put our record up against any country as far as the way we take care of our land, the way our pesticides are regulated, the way we use our pesticides. We have a fabulous track record and don’t need further regulation.”