Washington, DC
April 29, 2002

The National Corn Growers Association (NCGA) pressed hard for a stronger counter-cyclical program to be the centerpiece of a new farm safety net and its work was rewarded. Seventy-two days following passage of the Senate farm bill, the House and Senate Conferees have finally come to an agreement that will shape the nation's farm policy for the next six years.

NCGA President Tim Hume said, "We have to give a great deal of credit to Congressmen Larry Combest (R-Texas) and Charles Stenholm (D-Texas) for their leadership this past two and a half years, to Congress for expediting the process, and to staff who have worked long and hard to bring this farm bill agreement to fruition."

In early April, a significant breakthrough occurred when the House Conferees embraced the Senate's concept of updating yields in the counter- cyclical payment that recognizes the considerable changes in crop production since the mid 1980s. Conventional wisdom just weeks ago suggested the final farm bill would not include a yield update for the counter-cyclical program. Subsequent modifications in the yield update provision have helped to ensure more equitable treatment of producers between various regions and commodities.

NCGA also has backed the House bill's continuation of level, decoupled fixed payments and a marketing loan program that minimizes government influence on planting decisions. In the end, House and Senate conferees struck a compromise on the Commodity Title with significant increases in marketing loan rates that are reduced after the first two years. The corn loan rate will rise to $1.98/bu and decline to $1.95/bu, a change that will simultaneously up the counter-cyclical program's payment rate. Target prices for the counter-cyclical program will be confirmed following a scoring of the bill's costs by the Congressional Budget Office.

In another significant farm policy shift, the conferees agreed to more restrictive payment limitations: $40,000 on fixed payments, $65,000 on the counter-cyclical program, and $75,000 for combined loan deficiency payments and marketing loan gains. The three-entity rule and generic certificates would remain in place. House-Senate conferees settled on a total payment cap of $360,000, a sharp reduction from current levels.

"Under the payment limit provisions, it was critical that the certificate program was retained," said Hume, a corn grower in Walsh, Colo. "With the counter-cyclical program, we can expect far more producers to be impacted by payment limits." 

In a significant move, conservation title funding will increase close to 80 percent, including substantial increases for the environmental quality incentive program and Sen. Tom Harkin's (D-Iowa) new conservation security program.

The National Corn Growers Association mission is to create and increase opportunities for corn growers in a changing world and to enhance corn's profitability and usage. NCGA represents more than 32,000 members, 25 affiliated state corn grower organizations and hundreds of thousands of growers who contribute to state checkoff programs.