Tuesday, April 29, 2008
Farmers' risk is great
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Molly Pugh
Pugh is the executive director of the Virginia Grain Producers Association.
Virginia's corn producers and small grains growers are concerned about the progress of the 2007 farm bill. Already vulnerable with current programs, our producers have begun their 2008 growing season with no idea of what types of support may be available in the upcoming farm bill.
Most Virginia grain producers purchased crop insurance at significantly higher rates just to ensure a risk management tool, not knowing if a farm bill will provide an adequate safety net. It is unfortunate that our producers are in this position.
Virginia has seen a 35 percent increase in small grain acres this year, which will be harvested in just over one month. More than 50 percent of Virginia's corn crop has already been planted and our producers still have no predictable farm policy in place. In addition, Virginia's grain producers face increasing input costs such as paying over $600 per ton for liquid fertilizer when just two years ago the same fertilizer was $200 per ton. The ongoing uncertainty of prices and input costs are a considerable concern for all producers, including Virginia.
The grains industry is undergoing great change. Usual practice even two years ago is no longer applicable in today's grain industry. In order to meet future challenges effectively and efficiently, Virginia grain producers continue to call for a strong optional revenue-based countercyclical program within Title I. A well structured, revenue based option will provide better protection for Virginia producers and will generate overall savings for the 2007 farm bill.
A farm bill provides producers with support only when needed the most. A major issue facing farm bill progress is funding. Virginia producers call for lawmakers to structure an option that provides both answers; a much-needed safety net and more efficient spending. While there are several competing interests in the 2007 farm bill, we urge lawmakers to remember who this bill was originally created to protect.
Title I must be a funding priority in the 2007 farm bill. Virginia's producers feel strongly about a sufficient safety net option because it is necessary reform. Grain markets have strengthened, but dramatic increases in the costs of all inputs have risen and are squeezing producers' margins. Seed costs, crop insurance, land rents, labor costs and fuel have all spiked significantly as well.
Our producers are putting in the largest investment of their careers to make a crop this year. No matter the price of grain, if Virginia producers suffer another disaster they will face extreme losses and, in some cases, will not be able to continue farming. This type of increased pressure on our producers not only affects the grains industry but the end-users of our products as well.
In order to promote stability for all users of American grain including, livestock, consumers, food processors, renewable fuel and others, the 2007 farm bill must provide a safety net to guard against price volatility and other major risks.
Providing stability for Virginia's grain producers in turn provides support for all sectors which use grain for feed. Agriculture truly is the backbone of the American society providing jobs, exports, feed, fiber, food and fuel for the world. Farm policy must reflect the needs of the industry with a reasonable price tag. Virginia's farmers need the right policy, right now.
