NAWG Outlines Plan For Next Farm Bill

After over a year of preparatory work, the NAWG Board of Directors approved further details on its plan for the next Farm Bill, at the 2001Wheat Industry Conference.

Details of the proposal are meant to build on the successes of the 1996 FAIR Act, while securing the farm safety net that many say is missing from current federal farm policy.

The NAWG plan is built on the following five principles:

1) NAWG seeks to preserve the market-oriented approach and planting flexibility that were the hallmark of the 1996 Act.

2) NAWG wants to secure a guaranteed base payment, similar to the current Agricultural Market Transition Act (AMTA), throughout the life of the next Farm Bill. The payment would be fixed each year, frozen at the 1999 level.

3) NAWG would preserve the non-recourse wheat marketing loan, improve it by raising the cap to $3.15, and incorporate a guaranteed floor of $2.60 to prevent the loan rate from further decline.

4) The NAWG plan would create a counter-cyclical payment that would provide additional assistance in years plagued by low commodity prices, but would not come into effect when market forces were strong. The counter-cyclical wheat payment would be based on a $4.25 “Market Support Price.”  The payment would be calculated by subtracting the guaranteed base payment and the higher of either the national average market price or the marketing loan rate from the support price.  A Market Loss Assistance Payment would be issued to cover the difference. All payments would be decoupled from current production and applied to historic bases and yields.

5) NAWG has encouraged Congress to take action this year to address the short-term needs of agriculture that cannot wait until the next Farm Bill comes into effect. These include increasing the USDA baseline, making the payment in lieu of an LDP on grazed-out acres permanent, authorizing further emergency spending and other priorities.

“I believe we have fashioned a plan that will both meet the needs of the producer and has a reasonable chance of gaining real bipartisan support in Congress,” says Allan Skogen, president of the North Dakota Grain Growers Association and chairman of the NAWG Domestic Policy Committee.

The NAWG will formally present its plan to Congress in March when NAWG President Dusty Tallman testifies before the House Committee on Agriculture. For a more detailed copy of the NAWG plan, contact Wayne Hammon, NAWG’s director of government relations, ph. 202-547-7800.

Example of how the NAWG counter cyclical payment might work:        $4.25 trigger price        -  .64 (1999 AMTA payment)        $3.61      - 2.60 (marketing loan floor)      = 1.01  payment on 85%  of base acres Current farm bill not altered, with exception of additional triggered payment.  System of marketing loans and loan deficiency payments remain in place.