Philip Brasher, writing on Friday at the Des Moines Register’s Cash Crops Blog, stated that, “There’s no doubt who some of the winners and losers are in the Senate farm bill.

“For the winners, you have to start with farmers in the drought-prone Plains states.

“The bill,once it is merged with a tax package on the Senate floor, will create a permanent agricultural disaster program that was designed in North Dakota. The bill also makes the traditional subsidy programs a little richer by raising the loan rate and target price for wheat.

“Then, Kansas Republican Pat Roberts and North Dakota Democrat Kent Conrad, succeeded in rewriting the optional new average crop revenue (ACR) plan to make it more attractive to wheat growers and a lot less appealing to corn growers, the plan’s chief promoters.

“The key change removed the link between the ACR program and crop insurance.

“By doing so, farmers won’t get a cut in insurance premiums, a high priority for corn growers. On the other hand, farmers would get to collect both ACR payments and insurance benefits. That’s big for wheat growers, because they’re much more likely to have crop losses and insurance claims than corn growers.”

Mr. Brasher added that, “Another big winner: The crop insurance industry. The ACR plan would have cut revenue to companies and agents had the corn growers gotten their premium cut.”

Interestingly, recall that back on May 3 of this year, in an update posted at The Des Moines Register Online, Philip Brasher reported that, “The growing profits that crop insurance companies are making from selling their federally subsidized policies is catching the eye of Congress.

“Profits from crop insurance are three times as high as the rate of turn that insurance companies normally get from property and casualty insurance, government investigators told the House Oversight and Government Reform Committee.” [Committee press release available here; Chairman Waxman’s opening statement; witness list and opening statements.]

Mr. Brasher added that, “Forty cents of every dollar the government pays for the program goes to insurance companies, not farmers, said Lisa Shames, an official with the Government Accountability Office [GAO], the investigative arm of Congress [one page GAO summary; full statement via GAO].

“The chairman of the House committee, Rep. Henry Waxman, D-Calif., called the program a ‘textbook example of waste, fraud and abuse in federal spending.’”

Also, a Washington Post article from May 4 stated that, “Private companies are taking advantage of a poorly designed crop insurance program for farmers to reap ‘excessive’ profits while taxpayers absorb most of thecosts and risks, investigators told a House committee yesterday.

“Republican and Democratic members of the House Oversight and Government Reform Committee reacted with calls for major changes in the insurance program, which has paid out $26 billion over the past 10 years. It is rare for a panel other than the Agriculture Committee to take on a major farm program in an investigative hearing.

“Oversight Chairman Henry A. Waxman (D-Calif.) said the crop insurance system is ‘a textbook example of waste, fraud and abuse in federal spending.’ Citing testimony from the Agriculture Department’s inspector general and a report from the Government Accountability Office, Waxman said that ‘over $8 billion in taxpayer funds have been squandered in excess payments to insurers and other middlemen’ since 2000.”

A separate Post article from last year (October 15, 2006), “‘Farming Your Insurance,’” also highlighted issues associated with federal crop insurance.

And with respect to other winners in the Senate Ag Committee process that were identified in Philip Brasher’s update from Friday, “farmers in the drought-prone Plains states,” The Washington Post editorial board noted on Sunday that, “Every so often, nature turns its wrath on American agriculture. Even for very efficient farmers on prime land, drought, floods and frost are occupational hazards. And when extreme, unforeseeable weather conditions destroy crops and livestock, it’s appropriate for the nation to provide financial aid to the folks who produce our food and fiber.

“But what about farmers and ranchers who plant grain where unfavorable weather is the norm rather than an exception? Not much rain falls on Oklahoma, the Dakotas or the Texas panhandle. That’s just the way it is. Between 1985 and 2005, more than 12,000 purportedly drought-stricken agricultural producers in those states claimed federal disaster payments at least every other year. This group collected $1.4 billion in all, about 60 percent of total federal farm disaster relief aid during those two decades, according to a database compiled by the Environmental Working Group.

“You’d think that Congress would have concluded that there are better uses for federal tax money than propping up the same relative handful of semi-arid farms year after year. Perhaps Washington could provide some modest assistance to convert marginal cropland to environmentally sustainable grassland. Instead, the Senate Finance Committee has voted to create a five-year, $5.1 billion permanent disaster relief trust fund. The logic of the bill, championed by Democratic Sens. Kent Conrad of North Dakota and Max Baucus of Montana — a state that is also one of the top 10 recipients of disaster payments — is that farmers are entitled to a secure source of disaster relief, rather than having to ask Congress for it every year.”

The Post concluded by noting that, “The bill originated in the Senate’s tax-writing Finance Committee, because the Agriculture Committee needed extra money for other farm programs, and the only way to get it was either through spending cuts or additional revenue. Mr. Baucus, the Finance Committee chairman, came up with some tighter rules on alleged tax-avoidance schemes by business, and, with the backing of his committee, dedicated part of the resulting money to the disaster fund. Not even the House, which has already passed its own subsidy-rich farm bill, dared to do the same. Congress seems bound and determined to adopt a bloated farm bill this year. But it should at least stop this attempt to package agricultural welfare as disaster aid.”

In other coverage of Senate Farm Bill activity, Whitney Boyd reported on Friday at the Atlanta Journal-Constitution Online that, “While the House included a $50 million incentive program for Georgiapeanut farmers in its version of the bill, this provision was not included in the Senate version that passed this week. Facing this possible void, Georgia Rep. Sanford Bishop has been working to include the program in the compromise bill that lawmakers are negotiating. But prospects for its passage appear dim, Chambliss [Sen. Saxby Chambliss (R-Ga.)] said.

“Bishop, who has the largest peanut district in the U.S., said that without receiving long standing federal payments that peanut farmers are used to getting, many farmers might be forced out of business.

“His subsidies program would reward farmers for planting peanuts in a crop mix rotation, while limiting the acreage that could be planted by producers to optimize this rotation of the land. Chambliss said that he is also working to include a provision that would encourage optimal rotation for all crops. No funding has been set aside for associated with this proposed provision yet, but many lobbyist and farmers think the crop rotation may benefit peanut farmers in the long run.”

Meanwhile, Diana Marrero reported on Friday at the USA Today Online that, “Some students at Union County Middle School in Liberty, Ind., had never seen a pear until the school joined a federal pilot program five years ago that offers students fresh fruits and vegetables as snacks.

“Now in 14 states, the program could be expanded across the country under a $290 billion farm bill that sets the nation’s agriculture policy for the next five years.”

The article added that, “The expansion of the snack program could have significant benefits for students who typically don’t eat the recommended amount of fruits and vegetables a day, health experts say.”

In a related article on health and the Farm Bill, Rob Hotakainen reported on Saturday at the Kansas City Star Online that, “If you’re feeling fat these days, blame Congress.

“That’s just what the nation’s doctors are doing, saying that federal lawmakers are responsible for the fact that a salad costs so much more than a Big Mac.

“Hoping to produce thinner waistlines, many doctors — including the American Medical Association — want Congress to stop subsidizing the production of foods that are high in fat and cholesterol and spend more to promote fruits, vegetables, legumes and grains that are not.

“Farm Belt lawmakers are on the defensive.

“‘I agree that obesity and health are serious issues in America today,’ said Sen. Pat Roberts, a Kansas Republican, who is a member of the Senate Agriculture Committee. ‘However, blaming the cause on the crops that we grow in Kansas and/or the U.S. farm program is overlooking the personal responsibility we all have in our daily lives and diets.’”

Stephen J. Hedges reported on Friday at the Chicago Tribune Online that, “The legislation [passed by the Senate Agriculture Committee] also includes an average crop revenue, or ACR, program that committee Chairman Sen. Tom Harkin (D-Iowa) said might shift farmers away from dependence on subsidies.

“But that new program, which would pay farmers if a crop price drops below a price-and-yield formula calculated at the state level, would be voluntary for three years beginning in 2010.

“‘With the ACR, I think we can move in a new direction,’ Harkin said. ‘It’s a major shift toward a new type of program with farmers.’” (For more analysis on the ACR, see yesterday’s FarmPolicy update, which was written by Dan Morgan).

The Tribune article also stated that, “The bill, though approved by the committee on a unanimous voice vote, is hardly a done deal.

“Several senators have promised to oppose the proposed subsidy program on the Senate floor. And once the Senate adopts its version of the bill, Senate and House members will meet in a conference to hammer out differences in the legislation.”

For more on the differences between the House and Senate Ag Committee versions of the Farm Bill, see this discussion I had yesterday with DTN staff writer Chris Clayton.

In an article from Friday (link requires subscription) entitled, “Farm Bill Keeps Programs Intact,” Mr. Clayton outlined some significant differences between the House version of the 2007 Farm Bill and the Senate Agriculture Committee version passed last week.

In part, Mr. Clayton noted that, “The House and Senate will have to hash out differences between their two ‘optional’ counter-cyclical changes.”

We discussed this aspect of his article in great detail on Monday afternoon.

Click here for complete audio details

In addition, Congressional Quarterly writer Catharine Richert reported yesterday that, “The committee approved the draft measure by voice vote Oct. 25 after two days of debate that focused mainly on the proposal for a new subsidy to be called the Average Crop Revenue program.

“Under the plan, farmers would be able to choose either the traditional federal farm subsidy programs based on crop prices or the new program, which would link some payments to farm revenue targets set for each state and would trim other payments. The idea was developed by Democrats Richard J. Durbin of Illinois and Sherrod Brown of Ohio, with help from some farm groups.”

The CQ article explained that, “But the plan drew fire from some farm groups and the crop insurance industry, which said it would be prohibitive for some farmers and would take business from insurers.

“To mollify opponents, the committee adopted by voice vote an amendment by Pat Roberts, R-Kan., that would reduce the number of acres on which farmers could collect payments and would keep insurance premium rates where they are today, meaning crop insurers would preserve their bottom lines. It also would require farmers opting into the new program to continue participating for the life of the farm bill and would reduce reimbursement responsibilities for the crop insurance industry.”

With respect to Senate floor activity and the ACR, Ms. Richert indicated that, “But, just as it did in committee, the new revenue-based subsidy program may dominate floor debate.

“Some of the most vocal opponents to Roberts’ amendment are corn growers, who helped Harkin design the program and who are facing increasingly expensive insurance policies as more acres of corn are planted. They say the amendment would nullify the new subsidy’s benefits.

“‘We have serious concerns about this,’ said Sam Willett, senior director of public policy for the National Corn Growers Association. That group is doing a last-minute analysis of Roberts’ amendment to see how it would affect the industry.”

Note also that Sen. Dick Durbin (D-IL) expressed concerns about how the Roberts amendment changed the original ACR proposal in a conversation last week with Todd Gleason of the University of Illinois Extension Service.

In part, Sen. Durbin noted that, “I go into this debate believing that my good friend Senator Roberts has taken a roller brush to a Rembrandt. We had a pretty good piece of legislation and the crop insurance industry didn’t like it and made some changes in it.”

To listen to more of the discussion with Sen. Durbin, just click here (MP3- 4:30)

And Larry Lipman, writing on Saturday at the Palm Beach Post Online, stated that, “The final bill will be hammered out in a conference between the two houses.

“President Bush has threatened to veto the House version because he said it would not adequately shift the system of crop supports away from wealthy farmers.

“Further fights may break out in the Senate regarding an alternative crop-support payment system.”

In more specific indications of the executive branch position on the Farm Bill, Agriculture Secretary Chuck Conner stated in a speech yesterday that, “The Senate Agriculture Committee approved its version of the Farm Bill, as you know, last week and I am pleased to say it does contains some very good things, some very good things. But we believe it also needs to go further to achieve the kind of real reforms we need to make this year.

“The Committee’s version of the bill addressed several of the issues we raised in our USDA farm bill proposals.”

Sec. Conner added that, “The House version of the Farm Bill also included a revenue-based counter-cyclical program.

“And while the Senate and House versions differ from each other—and from our proposal, I want you to know that we are prepared to work with the Congress to make sure that whatever version of a counter-cyclical program is ultimately adopted will work as effectively as possible.

“The Senate’s decision to require, at least in 2008 crop, that farmers give up ownership of a crop when they lock in a loan deficiency payment,is an important step forward.

“The so-called ‘pick-your-price’ loophole in the current law adds significantly to farm program expenses.”

In addition, Sec. Conner stated that, “Finally, the provision in the bill that raises loan rates and target prices on crops such as wheat, barely, soybeans, sunflowers and canola, simply amounts to a step backwards.

“Quite frankly, we’ve talked so much about trade, this provision does paint a bulls-eye on the back of the American farmer.”

Along these lines, Bloomberg writers Alan Bjerga and Shruti Date Singh reported yesterday that, “Soro [Suleymane Soro, a farmer from the Ivory Coast] and Merritt [Kelli Merritt, a farmer from West Texas] are two faces of the more-than $280 billion farm bill the Senate may vote on next week. The legislation, similar to a House-passed measure President George W. Bush threatened to veto, would continue subsidy programs that totaled $3.1 billion in the 2005-2006 fiscal year.

“U.S. farmers like Merritt say the payments are vital. The World Trade Organization says they distort trade and lower prices, hurting farmers like Soro.”

The article added that, “Trade threats are having little impact on the U.S. farm bill debate in Congress. U.S. Senator Tom Harkin, chairman of the Senate Agriculture Committee, says U.S. growers seem willing to keep their subsidies and take their chances before the WTO.

“‘The votes aren’t there to change cotton programs,’ says Harkin, whose committee approved its farm bill last week. The committee expects the measure would cost about $288 billion over five years.

“Like the bill passed by the U.S. House of Representatives in July, it would create a program to subsidize cotton bought by domestic textile mills, attempting to shore up demand hurt by a shift of the global garment industry to China. It would make only minor adjustments to existing subsidy programs.

“President Bush, seeking to avoid further trade conflicts, threatened to veto the House bill, which will ultimately have to be reconciled with the Senate’s package.”

Additional editorial comment on the Farm Bill also appeared today:

The New York Times editorial board. “Sugar’s Sweetheart Deal” (today)- “Of all the government’s farm-support programs, there are few as egregious as the tangle of loans, quotas and import tariffs set up to protect the well-connected club of American sugar producers at the expense of American consumers and farmers in the developing world. This year’s farm bill will add American taxpayers to the list of casualties…[B]oth the House bill, which was passed in July, and the Senate version, which could be voted on as early as this week, guarantee that the government will buy from American farmers an amount of sugar equivalent to 85 percent of domestic consumption — regardless of how much comes in from abroad. To add insult to injury, both also increase the longstanding price guarantee for sugar.”

The Washington Times editorial board. “A FRESH and better farm bill” (today)- “At the very moment that the mutually back-scratching, special-interest-dominated agriculture committees in both congressional chambers have reported terrible, business-as-usual, five-year agriculture-reauthorization measures, the Lugar-Lautenberg FRESH alternative is truly a breath of fresh air. Its common-sense priorities are so striking that the only sharp elbows exchanged between liberal and conservative interest groups are the ones necessary to get to the front of the line to be the first to embrace Lugar-Lautenberg. When left-of-center Environmental Defense, Environmental Working Group and the National Urban League join right-of-center Club for Growth, Council for Citizens Against Government Waste and the National Taxpayers Union to hail Lugar-Lautenberg, you realize just how special the FRESH Act must be.”

Keith Good