USDA’s Scuse discusses farm bill options in ND
BISMARCK — Michael Scuse, U.S. Department of Agriculture Undersecretary for Farm and Foreign Agricultural Services, appeared in Bismarck on Monday to discuss farm bill programs and implementation with the ag industry and North Dakota legislators.
Scuse told U.S. Sen. John Hoeven, R-N.D., and agricultural organization leaders that USDA will roll out its programs for fall-seeded crops in 60 days, with signup by Nov. 15. Program signup for spring-seeded crops will come this winter.
Scuse agreed choosing among farm program options will be a “crap shoot,” as it is impossible to predict which option will be best, financially, over the five-year life of the bill. He told attendees, however, that the choice is between two relatively good farm programs.
Farmers likely aren’t focused on the question yet, but they’ll soon have a one-time choice between Agricultural Risk Coverage and Price Loss Coverage. Both programs are paid on “base” acres following a first-year base reallocation process.
Under ARC, farmers can choose farm-level coverage with 65 percent payment rates or county-level coverage with 85 percent rates. The ARC program is designed to address shallow losses, covering a farmer’s revenue between 76 and 86 percent of a five-year benchmark. The PLC program is similar to the traditional counter-cyclical program, paying farmers when market prices fall below fixed reference prices.
Mix and match
Scuse noted that a farmer can pick ARC for some crops and PLC for others. Farmland owners have received base and yield data on their land from the Farm Service Agency, and now need to accept or challenge that data.
The decisions “belong to the land, not the renter or operator” for the full five years of the farm bill, regardless of who farms it, said Aaron Krauter, FSA state director. Farmers can get a power of attorney for the landowners regarding program decisions, but must make sure the document is current and covers all relevant decisions.
At the roundtable, Andy Swenson, a North Dakota State University ag economist, demonstrated a decision aid computer tool that NDSU developed. Swenson said there will be at least 10 joint meetings between the extension service and the FSA in October to help farmers understand the programs.
Bob Wisness, North Dakota Grain Growers Association president, said he is pleased Scuse was willing to come and hear farmers’ concerns, but many moving targets remain. He says he isn’t making any decisions yet.
Bart Schott, a Kulm farmer and a former president of the National Corn Growers Association, said the decisions are made more difficult because of the wide basis level at the region’s elevators, in part because of poor rail service to move grain.
“There’s a great deal of uncertainty because of what you’ve seen in the pricing structure in the past 18 months,” Scuse acknowledged. “It’s going to be a crapshoot, it really is. The best you can do is look at your farm, what your yields are going to be, and what you believe the prices are actually going to be.”
Hoeven said one option might be better than the other in retrospect, but both options are designed to be good.
Mark Watne, president of the North Dakota Farmers Union, said he is concerned about whether prevented-planting acres are counted against bases when farmers reallocate bases under the program.
“There’s some risk in that,” he said, adding that it’s likely prevented-planting won’t be detrimental to farmers’ bases and yields.
North Dakota’s 2014 prevented-planting acreage is currently estimated at 1.7 million, which ranks sixth-highest in the state since records have been kept. The top five prevented-planting acreage years were: 5.6 million in 2011; 3.9 million in 1999; 3.8 million in 2013; 2.1 million in 2001; and 2 million in 2001.
Scuse told Watne the decision on prevented-planting hasn’t been made, but Watne later said that is good news.
“I think it’s good news because if they would have just made an initial ruling, they would have just made us count that information,” he said. “Now that they’re digging in and spending more time on it, I think they’re seeing that it does have a major impact for farmers in North Dakota, with this wet cycle we’re in.”
Among other topics Scuse addressed:
-- Supplemental Coverage Option: The SCO is designed to allow farmers to purchase a supplemental policy beyond their individual farm-based policy and protect them from market volatility. Scuse said 98 percent of the nation’s planted corn and soybean acres will have the option in 2015, as well as 94 percent of the spring wheat acres. Scuse said the program will be available on 100 percent of those crops in 2016
-- Noninsured Crop Disaster Assistance Program buy-up: USDA will work this fall on a program, as well as conservation compliance.
-- “Actively engaged” definition: Later this year, USDA will roll out a proposed rule to define “actively engaged,” the parameter for participation in farm programs. Congress didn’t define it in the farm bill, but USDA will define it after feedback from farmers and others.
“We felt it was better to not define it specifically, because the definition that would have ended up in the bill would not have been a good one,” Hoeven said. “Now the aggies can work with the ag professionals and get something good. If this bill works for our farmers and ranchers, it’ll work for everybody else.”
-- Conservation Reserve Program: The farm bill requires trimming the land-idling program to 24 million acres, down from a high of more than 35 million acres in the past.
Scuse said USDA is looking to target areas for specific regions. Hoeven said he is looking for ways to link federal CRP with state programs such as Private Land Open to Sportsmen, the Conservation Reserve Enhancement Program, State Acres for Wildlife Enhancement and Heritage Fund sources.