Washington, D.C. —
The Senate Agriculture Committee today agreed to include Senator Thune's Loan Deficiency Payments (LDPs) amendment to the Committee's markup of the 2007 Farm Bill. Senator Thune is a member of the Senate Agriculture Committee.
Senator Thune's amendment preserves a critical component of the family farm safety net. In particular, this amendment removed a potentially harmful requirement in the Committee's bill that would negatively affect all grain producers by requiring that they sell their crop at the time of claiming an LDP. By establishing this new requirement, producers would have lost a valuable marketing tool that allows them to sell their crops in response to market signals, not according to government rules.
"Loan Deficiency Payments are a critical piece of the `three-legged stool' that supports farm income and should not be weakened," said Thune. "Over the past year, I have met with countless agriculture groups and producers and have heard about their satisfaction with the 2002 Farm Bill. My amendment preserves an important part of the 2002 Farm Bill safety net, beginning with the 2009 crop year, which has benefited South Dakota producers for the past five years."
LDP's are marketing tools that allow producers to receive cash payments early in the harvest season if prices fall below certain levels. Commodity Credit Corporation marketing loans and LDP's have successfully provided farmers with needed income and allowed them to orderly market their grain, in response to market signals. The provision Senator Thune's amendment removed would have lessened the value of LDP's to producers as a marketing tools and would potentially cause disorderly grain marketing by forcing large amounts of grain into the marketplace when LDP payments are high.
Senator Thune's amendment preserves a critical component of the family farm safety net. In particular, this amendment removed a potentially harmful requirement in the Committee's bill that would negatively affect all grain producers by requiring that they sell their crop at the time of claiming an LDP. By establishing this new requirement, producers would have lost a valuable marketing tool that allows them to sell their crops in response to market signals, not according to government rules.
"Loan Deficiency Payments are a critical piece of the `three-legged stool' that supports farm income and should not be weakened," said Thune. "Over the past year, I have met with countless agriculture groups and producers and have heard about their satisfaction with the 2002 Farm Bill. My amendment preserves an important part of the 2002 Farm Bill safety net, beginning with the 2009 crop year, which has benefited South Dakota producers for the past five years."
LDP's are marketing tools that allow producers to receive cash payments early in the harvest season if prices fall below certain levels. Commodity Credit Corporation marketing loans and LDP's have successfully provided farmers with needed income and allowed them to orderly market their grain, in response to market signals. The provision Senator Thune's amendment removed would have lessened the value of LDP's to producers as a marketing tools and would potentially cause disorderly grain marketing by forcing large amounts of grain into the marketplace when LDP payments are high.