BLOOMINGTON, Illinois — Legislation commonly known as the U.S. Farm Bill expires at the end of September. The Food, Conservation, and Energy Act, its formal name, comes up for renewal every five years. It directs the U.S. government's food and agricultural policy. Changes to the bill this year come at a time when producers may need it most.
Drought conditions aren’t new to Matt Hughes. The Illinois farmer said "surviving to the next year is very important.”
Hughes has always had help from the government, in the form of direct payments through the Farm Bill.
“When we have a bad weather event or a downturn in the market that we didn’t foresee, kind of that little safety net to get us through to next year to regroup and do a better job,” he said.
But proposed changes to the bill, up for renewal in September, would end direct payments to farmers, something Hughes does not object to.
“Most of us would like to see changes in the Farm Bill,” he said.
What Hughes and most farmers would also like to see is government-subsidized crop insurance that offers protection in times of natural disasters.
U.S. Representative Tim Johnson of Illinois is on the House Agriculture Committee and is working to bring Farm Bill legislation to a vote. He says "crop insurance is the name of the game.”
“I think they want to make sure that we maintain the safety net, and I do too. It’s critical that we do that," he added. "Times are good now, the drought notwithstanding, but costs continue to rise, input costs continue to rise, and I think that safety net is the biggest concern they have.”
But critics of the proposed changes to the bill say the cost to taxpayers for crop insurance is too high.
There are also concerns that crop insurance affects both real estate and commodity prices, said Terry Roggensack, a grain specialist at the Hightower Report.
“There’s a lot of talk that they have caused land values to stay high because even in a year like this where a big producer, even if he has income-type crop insurance, they can withstand a year like this and it holds that crop value up because prices push up high enough," said Roggensack. "You’re going to still have those issues there.”
The Senate passed Farm Bill legislation earlier this year. It ends direct payments and subsidizes crop insurance, saving taxpayers about $23 billion. But it doesn’t match legislation in the House of Representatives, and lawmakers need to reach a compromise before President Obama can sign the bill into law.
“It’s got to come to a head sooner or later because we’ve got a deadline at the end of September, and we’ve either got to kick the can [postpone] another few months, which I oppose, or we’ve got to pass the Farm Bill,” said Johnson.
A Farm Bill that is now as important as ever to producers, who face the worst drought conditions in a generation.