Farmers Union delegates back supply management and COOL defense

Mar 9, 2012

The National Farmers Union (NFU) opened the group’s policy session last week by adopting special orders of business that would establish a voluntary grain reserve as part of federal commodity programs.

Delegates passed language stating that “deep, unjustified cuts to farm programs are unacceptable and the agriculture community should not be asked to do more than its fair share in reducing the federal budget deficit.”

NFU said crop insurance should be maintained and also expanded to cover types of agriculture other than mainly commodity crops. Still, NFU added, “The proliferation of price-based revenue products creates problems in the event of a collapse in prices.”

Delegates backed a proposal to include a commodity supply management proposal crafted from a study conducted by University of Tennessee ag economist Daryll Ray. The Market- Driven Inventory System would create a voluntary reserve on major commodities in which producers would put grain into storage for a fee and an assured payment at 60 percent more than the target price, which would be raised.

Some delegates spoke out against the proposal, arguing a grain reserve is not the direction farm policy was headed. Several state presidents spoke out for the reserve, noting it would have saved $96 billion in taxpayer subsidies from 1998-2010, and would have provided higher overall prices, without the volatile spikes.

“This has a component I wish we had in dairy,” said Joaquin Contente, president of the California Farmers Union. “This has supply management, and supply management is a powerful tool for farmers to have.”

Doug Sombke, president of the South Dakota Farmers Union, said the program is going to take some time to understand, but it’s a voluntary tool that farmers could use as an answer to manage wild market swings.

“We are accountable for the dollars we get from our taxpayers and eventually, when they start figuring out what these subsidies are costing, they are going to demand more from us,” Sombke said. “This is a great step forward.”

Woody Barth, president of the North Dakota Farmers Union, said such a reserve would also bring stability to the major buyers of commodities such as corn—livestock producers and ethanol plants.

“This reserve will help stabilize the prices for the feedstocks for ethanol,” Barth said.

NFU delegates adopted the Market-Driven Inventory System into the group’s policy. President Roger Johnson told DTN last Monday he expected to discuss the program at a Senate Agriculture Committee hearing on commodity programs the following week in Washington.

NFU delegates also maintained policy stating, “NFU supports reestablishment of compliance requirements for federal crop insurance eligibility so that all existing or new crop and revenue insurance and other risk management programs are subject to all conservation compliance provisions.”

NFU also passed language reacting to the World Trade Organization’s (WTO) ruling declaring the country-of-origin label (COOL) for meat products as a trade barrier. NFU stated consumers have a right to know where their food comes from, and ranchers and farmers have the right to differentiate their products in the market. On the ruling, NFU stated the U.S. should ignore any WTO penalties if the appeal is unsuccessful. Further, the U.S. should either work to amend the rules or consider withdrawing from the WTO if the U.S. isn’t able to prevail. Adding the words “work to amend WTO rules” led to a lengthy debate before being included.

“We can’t just throw our hands up in the air and say we don’t want to participate anymore,” said Jana Linderman, a delegate from Iowa who had the words added.

NFU had meetings set for the end of the week to discuss dairy reform and policy calling on USDA to amend the Beef Promotion Act to ensure no single organization receives more than 50 percent of total checkoff dollars. — Chris Clayton, DTN