In the Senate, Sen. Kirsten Gillibrand (D-NY) proposed legislation exempting certain producers from the DSMP, but it does not appear to have gained traction as a compromise measure. It is unknown whether she will offer her proposal as a compromise amendment during Senate committee markup.
Reps. Bob Goodlatte (R-VA) and David Scott (D-GA) introduced an amendment in the House, with the strong backing of the International Dairy Food Association (IDFA) which would repeal only the DMSP from the new programs. The vote failed during committee markup in 2012, but the two sponsors have announced their intention to reintroduce the amendment during markup on May 15. Although it is likely to fail, it highlights a key barrier to consensus - and perhaps passage - on this key portion of the bill.
Farm Safety Net
Both the House and Senate bills would eliminate direct payments and use the savings to bolster crop insurance. The Senate bill did away with counter-cyclical payments and the Average Crop Revenue Election (ACRE) program. In their place, it established the Supplemental Coverage Option (SCO) and the Agriculture Risk Coverage (ARC) program, margin protection programs that would provide "shallow loss coverage" to producers, in addition to their crop insurance coverage, up to a maximum of 89% of the producer's risk.
The House bill, on the other hand, gives the producer a choice between new programs called Revenue Loss Coverage (RLC), a modified version of the revenue-based SCO, or Price Loss Coverage (PLC), price-based coverage which uses target rates to determine payment levels. House Agriculture Committee Chairman Frank Lucas (R-OK) has stated that his Committee's farm safety net provisions will remain intact.
The ascension of Sen. Thad Cochran (R-MS), a southerner, to Ranking Member of the Senate Agriculture Committee, replacing Sen. Pat Roberts (R-KS), a Midwesterner, is an indication that change may come to the farm safety net provisions proposed in the Senate bill. Complaints against the provisions were that the new policies - the ARC and SCO, especially - accompanied by the elimination of direct payments, benefited Midwestern producers to the detriment than southern producers. Generally, southern agriculture supports direct payments because their value is greater to southern farmers, because of the crops they grow, than they are to Midwestern farmers. Southern farmers preferred the proposal by Chairman Lucas, where target payments were kept as the benchmark for payments to producers, effectively maintaining the counter-cyclical payment the Senate eradicated. The Senate bill may reflect changes to its farm safety net provisions, likely prompted by Sen. Cochran, that more closely resemble those in the House bill.
Some farm organizations - notably, the American Soybean Association (ASA) and the American Farm Bureau Federation - have adjusted their positions on the farm safety net from last year. ASA, previously a supporter of the "shallow loss coverage" proposal, announced that it would support updating and extending the current Counter-Cyclical Program and continue to support the SCO as a complement to federal crop insurance. The Farm Bureau, which previously supported catastrophic loss coverage over shallow loss coverage, now supports protection against smaller revenue losses, including a stacked income protection program, bolstered crop insurance, and counter-cyclical payments and marketing loans. Both organizations support eradicating direct payments.
Most stakeholders and lawmakers continue to support crop insurance, however. While some have argued that federal crop insurance subsidies drive up the cost of the program, most attacks to the increase in crop insurance expenditures - which have increased as a result of the record payout following last year's devastating drought - have been successfully fended off by producers and their lawmakers strongly emphasizing its importance. Lawmakers are also debating whether to tie crop insurance subsidies to compliance with conservation programs, a concept the Senate Farm Bill included but the House bill did not.