Above: Iowa Soybean Association Director of Policy and Producer Outreach Carol Balvanz.
With debate over the Senate farm bill set to restart until June 3 and the House version rumored to hit the House floor the week of June 17, the first drafts of the farm bill are likely to change soon. But Iowa Soybean Association Director of Policy and Producer Outreach Carol Balvanz says the two different approaches to farm policy from the two different chambers of the legislature will both affect Iowa’s soybean farmers directly, and not necessarily for the best.
The Senate bill, for example, ties crop insurance subsidy eligibility to conservation compliance. Iowa farmers are big on conservation compliance. Will that be a problem? I don’t know yet. I’ve done a survey of some of our farmers and some of them are okay with that idea since they did not want to lose the crop insurance subsidy amount, and that was the trade-off, really, was that they were going to cut that crop insurance subsidy.
On the House side, you’ve got target prices that are tied to current production rather than historical production. Does that tend to make farmers plant for the farm bill? We’re not sure. And so those kinds of things will get hashed back and forth.
You’ve also got the different look at SNAP, at how the nutrition programs will be funded. The Senate only cuts $4 billion, the House cuts $20 billion. Neither side seems to want to be able to budge, and yet in the House they’re saying the Democrats to do not want to cut a penny, and on the Senate side there are people who want to cut more.
Balvanz says part of her concern over the Senate’s link of crop insurance to conservation compliance is that some producers may simply opt out of the program as it becomes connected to other regulatory issues.
Direct payments are also out in both versions of the farm bill, leaving the door open for more market-based farm policy. Balvanz says a move to market-based policy may be based on the faulty premise that producers are becoming wealthy from the high price of commodities. Because subsidization of production causes an increase in supply above the amount dictated by the market’s demand, commodity prices are kept low, as they had been with direct payments in place. Balvanz fears that the elimination of direct payments may be regretted later, when the currently-high price of commodities drops to more realistic levels and producers are left with high input and land costs.