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Sunday, 07 July 2013 22:00

Lack of national farm bill drives uncertainty in agribiz

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The failure by the U.S House of Representatives in late June to pass the historically bipartisan “Farm Bill” has many in Michigan — a state with the second-most diverse crop array in the country and where agriculture accounts for approximately $90 billion in revenue — feeling a sense of unease about the future.

And agribusinesses, like most other businesses, don’t deal well with inconsistency.

“The biggest thing … is the uncertainty,” said Bob Boehm, manager of the commodity and marketing department for the Michigan Farm Bureau. “We don’t know what we don’t know.”

The bill, which had passed the Senate with relative ease and considerable bipartisan support, fell apart when GOP leadership in the House failed to get its divided caucus to come together and approve the bill.

“Unfortunately, the Republican leadership offered some amendments that were against the agreement,” said Sen. Debbie Stabenow (D-MI), who serves as chair of the agricultural committee.

The farm bill is typically seen as a five-year commitment to the larger agricultural and wildlife community, Stabenow told MiBiz. Aside from simply providing support to farmers, it helps with conservation such as increased protection for the Great Lakes, gives assistance to rural communities and provides funding for fresh fruit and vegetables in schools.

Stabenow said that without a farm bill in place, even food-related businesses such as the Downtown Market in Grand Rapids could be affected, although she was unable to speak to specific consequences.

“The truth of the matter is (Michigan) doesn’t have an economy without agriculture,” she said.

Stabenow said that much of the bill was focused on longer-term reform, notably a move away from a “direct pay” model, commonly known as the long-in-place farm subsidies, to more of a risk management insurance program.

“Farming is the riskiest business there is,” the senator told MiBiz. “No one else has to worry about how much rain we are going to have this week. (Farmers) just need to know there is insurance if there is a loss.”

Under this new model, farmers and others in the agricultural industry would have no longer received federal dollars in years when their crops were strong and plentiful. Rather, they would have received money in the years when weather or other uncontrollable factors did not yield the necessary crop.

Agricultural advocacy groups were also supportive of the new model.

“Farm Bureau members support the move from direct payments to more of a focus on risk management tools, especially crop insurance,” Boehm said. “We want to see a continued improvement in crop insurance products offered on existing crops, as well as an expansion to include more crops and livestock commodities, which are important to Michigan farmers.”

Stabenow said that the conversations at the federal level largely began about two years ago during the period of the so-called “super-committee” in Congress that formed to begin looking at ways to address the country’s deficit.

Stabenow’s agriculture committee was the only group in the Senate to come up with bipartisan deficit reduction, which totaled $24 billion.

Aside from traditional farming — crops and livestock — the bill also had measures designed to strengthen the food processing industry, a large part of Michigan’s agricultural sector and a significant part of West Michigan’s economy.

“The most important thing around food processing (and energy initiatives) relates to financing,” Stabenow said. “We need a farm bill because (the U.S. Department of Agriculture’s Rural Development division) provides the financing for many of these projects.”

It remains unclear just to what extent — financially or in terms of production — the lack of a farm bill will have on the overall economy for Michigan. Boehm at the Michigan Farm Bureau remains hopeful that the politicians can come to a compromise and support the industry.

“Overall, (the Farm Bureau) was supportive and looking forward to getting a farm bill through conference committee to work out differences between the Senate and House versions. The key is the need for certainty,” Boehm said. “With the myriad of uncontrollable factors farmers must manage each year, national farm policy ought not be one of them.”

Read 4394 times Last modified on Friday, 19 July 2013 11:54

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