USDA Proposal: Where’s the Equity?

Statement of NAWG President Dale Schuler on the Department of Agriculture’s 2007 Farm Bill proposal:

The Department of Agriculture missed an opportunity Wednesday to increase equity in farm programs.

While wheat growers support the idea of an increased direct payment, wheat producers have not received any counter cyclical or loan deficiency payments over the term of the 2002 Farm Bill; a shift of payments within crops instead of in total just ensures that wheat growers will be further disadvantaged. In light of the fact that the only program wheat growers can rely on is the direct payment, and the fact that input costs in many areas have doubled, the proposed 7 percent increase in the direct payment over the final three years of the 2007 bill is insignificant.

NAWG has examined a number of revenue assurance programs but has yet to find one that will provide adequate support for wheat growers because these programs do not work well in areas of variable production and, in order to meet WTO obligations, these programs are capped at 70 percent. Like most in business, growers cannot survive a 30 percent revenue loss.

These proposals together will provide unequal support between commodities, which will interfere with market signals and unduly influence planting decisions. These shifts will not be favorable to wheat growers or users.

Wheat did not receive an adequate safety net in the 2002 Farm Bill. We have talked about this in the industry, in public and with Secretary of Agriculture Mike Johanns – and it has been a consensus that wheat is not equitably supported. USDA’s proposal will only exacerbate and institutionalize the inequity toward wheat in the 2002 bill. No group of growers would be more disadvantaged by this proposal than wheat growers.

We were pleased to see USDA’s interest in dramatically increasing money for loan guarantees for cellulosic ethanol plants. In addition, many wheat growers support consolidating the conservation cost-share programs. However, providing an adequate safety net to keep growers on the land is a necessary precondition for these programs to work.

National Association of Wheat Growers
415 Second St. NE, Suite 300
Washington, DC 20002
Phone (202) 547-7800 ? Fax (202) 546-2638
www.wheatworld.org
Contact: Melissa George, (202) 547-7800 (office)
(202) 386-2585 (cell)

For Immediate Release
Jan. 31, 2007