Agricultural News
NFU Promotes Voluntary Grain Reserve as Better Farm Bill Plan- Designed to Hold Down Price Volatility
Mon, 05 Mar 2012 18:46:53 CST
National Farmers Union (NFU) unveiled Phase II of its study on the Market-Driven Inventory System (MDIS) at a press conference during the organization's 110th Anniversary Convention in La Vista, Neb.
"Farmers are entering a potentially dangerous period when it comes to the farm safety net," said NFU President Roger Johnson. "In Washington, we are seeing 'cut first, ask questions later' attitude which will cause harm to the farm safety net and take away some of the protections that family farmers and ranchers need. Unfortunately, around the country these past few years we are seeing more severe weather, meaning we need more of a safety net, not less. MDIS would help provide farmers and ranchers with protection similar to what they receive now at a significantly lower cost to taxpayers."
Johnson conducted a telephone news briefing on Monday afternoon- and we have comments from him- click on the LISTEN BAR at the bottom of the report to hear our report with Roger Johnson.
The study, commissioned by NFU, found that over the next ten years, farmers and ranchers would receive a slightly higher income under MDIS than under current policies, while the federal government would spend approximately 40 percent of what it would if current policies were extended. The study estimated that the current policies would cost a total of $65 billion, while MDIS policies would cost $26 billion from 2012 to 2020. The value of exports sold would also increase $15 billion dollars under MDIS policies during the period studied.
"MDIS would provide a significant cost savings to taxpayers while maintaining current levels of income for farmers and ranchers," said Johnson. "It would also help reduce the wild price swings that cause harm to so many. Reduced price volatility will benefit farmers and ranchers, the hungry, ethanol producers, and many others. MDIS would benefit so many Americans and should be implemented in the next farm bill."
This study, conducted by the University of Tennessee's Agricultural Policy Analysis Center and commissioned by National Farmers Union, presents an alternative policy approach that will reduce overall farm payments. The policy approach includes a combination of farmer-owned reserves, increased loan rates, set-asides, the elimination of direct payments, and reduced reliance on other government payment instruments. The study examines what the effects of MDIS would have been during the period from 1998 to 2010.
Who benefits from the MDIS?
Farmers: MDIS helps smooth out some of the wild price swings that can put some farmers out of business. By providing a greater level of income certainty, MDIS helps farmers plan for
the future without decreasing farm income.
Livestock Producers: Less volatile commodity prices from the MDIS helps livestock producers keep input costs more stable and helps to prevent skyrocketing grain prices, which can bankrupt livestock producers.
Ethanol Industry: Rising commodity prices are damaging to the ethanol industry and can cause disruptions in the supply chain. MDIS decreases price fluctuation faced by ethanol plants and ensures more stable production, which in turn puts America on the road to energy independence.
The Impoverished: Particularly in developing nations, a small increase in commodity prices can mean the difference between putting food on the table and going hungry. MDIS reduces the price swings that cause many people to go hungry when they can no longer afford food.
Taxpayers: A study conducted by the University of Tennessee and funded by National Farmers Union found that, had MDIS been in place from 1998-2010 rather than the existing programs, taxpayers would have saved more than $95 billion compared to what the federal government actually spent on farm programs. This is nearly a 60 percent reduction in expenditures.
Click here for a seven page overview of the proposal as developed by Dr. Daryl Ray of the University of Tennessee.
WebReadyTM Powered by WireReady® NSI
Top Agricultural News
More Headlines...
