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Farm bill forecast: Sen. Thune seeking to cut costs, pay farmers more for productive land

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Joel Wieczorek runs his combine harvesting his field of wheat in 2016 northwest of Stickney. (Matt Gade/Republic)3 / 4
A young calf less than a day old gets sniffed by its mother in one of the Weber Charolais & Red Angus cattle lots Northwest of Wagner in March 2017 in this file photo. (Matt Gade / Republic)4 / 4

More commodity and conservation programs for less cost.

That's part of an ideal farm bill for John Thune, a Republican U.S. senator representing South Dakota.

Thune is a member of the United States Senate Committee on Agriculture, Nutrition and Forestry and has helped write three farm bills since he took office in 2005. He said the next farm bill, scheduled to be passed in 2018, must be "more creative, innovative and forward-thinking," all while cutting costs.

"We're always looking for ways, and I think we should in any government program, to spend dollars more efficiently to make taxpayer dollars go further," Thune said.

That could include cuts to the food stamp and nutrition title, which makes up about 85 percent of the current bill's budget. Thune suggested cuts to that title in the last farm bill, which he said could cut administrative costs without lowering coverage for people on the program.

But as for what the final budget will be, Thune said the Congressional Budget Office will have a major say, so he's more focused on developing policies to help farmers and ranchers succeed.

"We want to get the policy right, and we think if we can get the right policies in place, that will create the right conditions to help get the ag economy back on its feet," Thune said.

South Dakota farmers have experience record corn yields in recent years, but even on highly productive land, they've struggled to create a positive revenue stream. So one of Thune's proposed changes could surround the Agriculture Risk Coverage (ARC) program, which was created in the last farm bill, passed in 2014.

ARC provides revenue loss coverage at the county level when the actual county crop revenue of a commodity is less than a preset guarantee.

Thune said ARC payments are based on a five-year rolling average, but with crop prices falling for about five years now, Thune said minimal, if any, payments are being made from the program. Thune said officials are discussing new concepts to offer "some stability for the farm economy" but did not elaborate.

"We want to make sure we're doing everything we can to get farmers to where they're actually, at least, holding their own, hopefully profitable, and until we get into a better economic situation on the farm," Thune said.

For less-productive land, Thune has proposed creating the Soil Health and Income Protection Program (SHIPP), a voluntary alternative to the Conservation Reserve Program (CRP) that would allow farmers to remove up to 15 percent of their land from production and receive payment from the federal government, just like the CRP program, which is designed to promote habitat for wildlife.

Unlike CRP, which requires farmers to enroll land for 10 to 15 years, SHIPP would only require a three- to five-year commitment, with a payout of one-half the amount of CRP enrollment.

But Thune has plans for CRP, too. Instead of replacing the program, Thune would like to see the CRP acreage cap rise from 24 million acres to 30 million acres.

While implementing the changes would require additional funding, Thune said the cost increase would be at least partially offset by savings.

"If you have 15 percent of a farm's land that's not in production, that also means there's no need to make a crop insurance payment," Thune said. "You're going to be making crop insurance payments on a considerably less amount of acreage."

There's at least one piece of the last bill Thune will fight to keep in the next one. A permanent disaster program, which Thune helped write into the 2008 farm bill, has benefited livestock producers primarily in western South Dakota after natural disasters — like a blizzard that killed up to 100,000 cattle in 2013 — and economic disasters in the last few years.

Without providing details, Thune is also focusing on developing an appropriate safety net in the commodity title, a strong crop insurance program and a credit title that keeps capital flowing even during down years. If those are put in place, Thune believes the next farm bill will benefit producers across the nation.

"I think those are all features of a farm bill that would be really good for South Dakota, and I would argue, would be really good for the country as well," Thune said.