Word on Wheat: Standing Ground, Working Together

March 20, 2009 Bookmark and Share

Jeff Newtson, NAWG Domestic and Trade Policy Committee Chairman

My hat is off to those who have raised opposition to the Obama Administration’s recent budget proposals. The agricultural community has stood up and said enough is enough – the 2008 Farm Bill needs to be allowed to work as Congress intended.

Three parts of the proposal were particularly disturbing to me – those targeting crop insurance, direct payments to producers with gross revenues of more than $500,000 and the Market Access Program, which our industry uses to promote its products overseas.

Crop insurance is one of the most successful programs used by farmers today. The ability to insure crops has brought a tremendous amount of stability to rural economies, benefiting not just farmers but all the businesses in rural areas that depend on them. Crop insurance benefits producers of many crops in all 50 states. Allowing a reduction in crop insurance assistance to producers and companies to the tune of nearly $6 billion would be disastrous to many in rural economies. This is certainly not to say that there aren’t needed changes to the crop insurance program, but existing problems can be fixed without letting a good system be cut up and discarded to save a few dollars.

The Administration also proposed phasing out direct payments to farmers with gross sales over $500,000. While half a million dollars in sales sounds like a lot of money, it is not hard to come up with $495,000 of expenses with chemical, fertilizer and machinery costs in today’s market; a combine alone can cost upwards of $300,000. With the small margins seen by many in the agricultural arena, it is widely agreed upon that gross sales are not an accurate measure of profitability.

And, in fact, the 2008 Farm Bill has already clearly set parameters for program participation by outlining new adjusted gross income (AGI) and payment limits that were discussed at length as Congress formulated the bill’s language.

The 2008 Farm Bill also reiterated the importance of the Market Access Program by fully funding it despite a very tight budget situation. This program is used by organizations that also utilize grower dollars – in our case, U.S. Wheat Associates – to promote our products overseas. The wheat industry exports about half its crop in a typical year. That’s good not only for producers and those we are exporting to, but also for our trade balance, and these efforts are in need of our country’s continued support.

Though I strongly disagree with many items in the budget proposals we’ve seen recently, I know the agricultural community and the Administration can work together in a lot of ways.

The fact is, our industry can be a solution for many of the problems President Obama would like to solve during his presidency. We are part of the solution to ending hunger in America with the cheapest and safest food supply in the world. We are part of the solution to reducing greenhouse gas emissions with the crops we raise and the farming practices we utilize. We are part of the solution to energy independence with the ethanol we can produce and the windmills that stand on our property. We are also part of the solution to burgeoning deficits with the income our exportable crops bring into the United States from our foreign trade partners.

The 2008 Farm Bill was crafted with the goal of bringing a safe and reliable food supply to the nation’s dinner tables. Every citizen of the United States gets benefits from farm programs and, by keeping our agricultural safety net in place, we can take a giant step forward in achieving these solutions.

– Newtson is a wheat producer from Helix, Ore.