Johnson says extension bad idea

from the National Farmers Union:

OFU Executive Director Linda Borton and Mel Borton at the Farm Bill Now! rally in Washington, D.C. this past summer. Photo: National Farmers Union

WASHINGTON – National Farmers Union President Roger Johnson issued the following statement amid reports that Congress may consider an extension of the 2008 Farm Bill. The 2008 Farm Bill expired on Sept. 30:

“With the current legislative session quickly coming to a close, it is imperative now, more than ever, that Congress act during their lame duck session before substantial harm is done to our farmers, ranchers and all Americans, who depend on a stable farm economy, a healthy environment and access to affordable nutrition programs.

“Merely extending the current law may well be more difficult than passing a new five-year bill. A short-term extension would reveal a litany of problems that will not be easily fixed when a new farm bill eventually is signed into law.

“The drought this past summer left producers unprotected because livestock and crop disaster programs had expired. Extending current law could leave farmers and ranchers in drought-stricken regions without the tools needed to recover.

“Direct payments may well be eliminated in a farm bill extension, in order to provide for deficit reduction which would remove $50 million from the next farm bill in addition to other reductions in baseline funding. This will likely put substantial pressure to cut crop insurance, which is a critical part of the safety net.

“Thirty-seven conservation, energy, research and specialty crop programs do not have baseline funding beyond the duration of the last Farm Bill and have now expired. Among these expired programs are a number of important conservation programs, the entire energy title and other programs of importance to beginning farmers and local and regional food systems. It is almost assured that all of these programs will have reduced or eliminated funding under an extension that would be nearly impossible to recover in a subsequent farm bill.

“Simply put, a comprehensive, five-year bill just makes more sense. A temporary extension would be an inadequate solution that would leave our farmers and ranchers and the nation they feed crippled by uncertainty.”

USDA today released the latest 2012 Farm Income Forecast and data show many family farmers are still dependent on off-farm income to make ends meet.

Overall, economic numbers for agriculture look good despite the drought that plagued much of the country this year. USDA Secretary Tom Vilsack said in a press release:

“Today’s forecast is heartening. It confirms that American farmers and ranchers remained impressively resilient in 2012, even with tough odds due to one of the worst droughts in more than a generation. Thanks to its ability to remain competitive through thick and thin, U.S. agriculture is stronger today than at any time in our nation’s history, supporting and creating good-paying American jobs for millions. While down slightly from the August forecast, today’s estimates for net farm income are the second-highest since the 1970s, while total farm household income is expected to rise. At the same time, the positive trend of falling debt ratios continue. The forecast suggests that strong farm income should remain a positive factor in carrying farmers and ranchers into the 2013 growing season.”

Here are two charts that caught my eye from the report.

First, size matters in today’s agricultural economy. The chart below shows that if your farm is generating less than $250,000 in gross sales, a large portion of your household income is probably coming from off-farm work or another source. The second chart below shows that farm households do a bit bitter in terms of median and mean income as compared with all households.

If you want to take a look at more on this topic, visit the Farm Sector Income & Finance pages at USDA ERS.