The Commodity Classic brings together the most influential crop organizations from across the United States. What happens there can have far-reaching implications for Canadian farmers. Western Producer reporter Sean Pratt filed these stories from the meetings, held March 3-5 in Tampa, Florida.
TAMPA, Fla. – America’s largest and most influential agricultural commodity group is contemplating getting rid of a subsidy that has drawn the ire of Canadian growers.
The National Association of Corn Growers passed a resolution at the 2011 Commodity Classic conference to investigate moving direct payments into other safety net programs.
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Observers of U.S. farm policy say it’s the first time one of the main crop groups has seriously contemplated such a move.
Ron Bonnett, president of the Canadian Federation of Agriculture, was surprised by the news.
“I think it’s a real interesting development,” he said.
“It’s unusual because they’ve been pretty steadfast for the last number of years in supporting the types of programs they had in place.”
Canadian growers find direct payments to be one of the most irritating, production-distorting forms of U.S. farm subsidy, so Bonnett is pleased to hear groups like the corn growers talking about moving that money into more palatable programs like crop insurance.
Corn growers weren’t the only farmers discussing the issue at the Commodity Classic.
It was also one of the themes explored during a session on farm policy, where there was disagreement on what should be done.
Chandler Goule, vice-president of government relations with the U.S. National Farmers Union, said his organization has always opposed direct payments.
He’d like to see the $5 billion annual expenditure redirected into other safety net programs such as countercyclical and direct loan payments and the federal crop insurance program.
Goule said it’s hard to justify doling out public money to farmers when commodity prices are high.
Mary Kay Thatcher, director of public policy with the American Farm Bureau Federation, said there is no appetite in her organization to get rid of direct payments.
The proposal has support in the Midwest but she would be “skinned alive” for even raising the topic in the southern part of the country.
Thatcher said some growers have the mistaken impression that shifting the money to crop insurance would subsidize their premiums to the tune of 90 to 95 percent.
She said at most it would boost the government’s portion to 75 or 80 percent.
“Some farmers believe we’ll quit taking a beating in the press from the Wall Street Journal and the Washington Post if we don’t have direct payments. I think that’s a fallacy,” said Thatcher.
She contends vocal critics of agriculture like the Environmental Working Group would simply shift their ire toward the heavily subsidized crop insurance program.
“Unfortunately, I don’t think the hammering ends.”
Thatcher said farm groups are reluctant to publicly admit that they’re willing to cut direct payments. But they need to have the discussion behind closed doors and let her know what they’re thinking so she knows what tack she should be taking in Washington.
Goule said direct payments used to be a regional issue with growers in the north opposed to it and the cotton, rice and peanut growers in the far south and corn growers in the Midwest in favour of maintaining them.
Support for the controversial subsidy appears to be waning in the key corn-growing states where growers have been reading the tea leaves in Washington.
“Direct payments are very difficult to defend in the press, so I think that’s why you’re seeing the debate now among the corn growers.”
