Direct Farmer Payments Out, New Safety Net In

Vilsack, Peterson

By Don Davis

Complex is about to replace controversial in federal farm policy.

The much-maligned practice of the federal government paying farmers, whether they needed it or not, is going away. U.S. Agriculture Secretary Tom Vilsack stopped in St. Paul on Thursday to announce its replacement: two online programs designed to provide farmers money when prices or revenues drop.

“Farming is one of the riskiest businesses in the world,” Vilsack said. “These new programs help ensure that risk can be effectively managed so families don’t lose farms that have been passed down through generations because of events beyond their control.”

Added U.S. Rep. Collin Peterson: “This safety net actually is tied to risk and what happens on the farm.” Unlike in the past, there will be no direct payments to farmers regardless of their need.

Vilsack was surrounded by Minnesota’s two U.S. senators and two House members, all Democrats, and announced the programs: Agriculture Risk Coverage and Price Loss Coverage. Farmers must pick between the programs by next spring.

The event was held on the University of Minnesota St. Paul campus, with farm smells in the air and cows mooing nearby. University personnel helped design online tools that will help farmers sign up for the programs.

The tools become active Monday at usda.gov, but Vilsack said farmers have months to decide what works best for them.

Peterson, who represents western Minnesota, said that some farmers will do better, some worse, than under the controversial direct payments. He and Vilsack said the advantage of the new programs will be their ability to save family farms.

Peterson, the top House Democrat on the Agriculture Committee, said farmers need to look carefully to see which program will help them most over the next five years, the length of time for which farmers must sign up. With land and crop input costs high, alongside low prices, “I’m worried,” he added about farmers.

Nearly all of the country’s 350,000 commercial farmers will use the new programs.

The congressman said he is not worried that the new online service will encounter problems like the Obamacare health insurance marketplace did last year. Vilsack said he hopes the online service works, and tried to sooth farmers by saying it was developed by the university community, not government.

“These tools are easy to use,” Vilsack promised.

The Agriculture Department website will give farmers “as much information as we can so they can make an informed decision between these programs,” the secretary said.

Vilsack said meetings will be held across Minnesota soon to introduce the new programs to agribusiness professionals and, after harvest, more than 60 meetings are planned for farmers.

Crop insurance will continue under the new farm bill, covering things such as crop losses due to weather. However, the programs Vilsack highlighted Thursday are new.

Price loss coverage will send farmers payments if a crop’s national price is below a “reference price” previously set. Payments will vary by crop.

Agriculture risk coverage, on the other hand, will be paid based on an individual’s or a county’s crop prices.

“There are no uniform right decisions,” U.S. Sen. Al Franken said. “This is specific for each farmer.”