02/01/07 USDA`s proposed safety net changes

Farm and Ranch February 1, 2007 The commodity program USDA is proposing for the 2007 Farm Bill would base Counter Cyclical payments not on market prices but on revenue. In detailing the Administration's farm bill proposal Agriculture Secretary Mike Johanns said the revenue based approach will actually work better across the commodities and provide a true safety net. Johanns: "We have actually done comparisons here with those commodities where you can look and say this will work better. Why? Because it is based upon a revenue trigger not a price trigger. The price trigger is going to deal people out of the safety net when they need it the most." Like when prices are high because of short crops which means the producer has little to sell to benefit from high prices. USDA proposes increasing the Direct Payment, which is decoupled from price and production. The current payment for wheat is 52 cents a bushel and it would increase to 56 cents for 2010 through 2012. USDA's proposal retains the commodity loan program and LDPs, but; Johanns: "We are going to adjust the loan rates down to more reflect the actual market." The current national loan rate for wheat of 2-75 a bushel would drop to an average of 2-58 which would be the maximum rate allowed. Posted County Prices would be determined on a monthly basis instead of daily. These are just a few of the sixty plus proposals the USDA is making and it will be Congress which decides which, if any, will be in a new farm bill. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.