May 24, 1999

House Agriculture Committee Chairman Larry Combest (R-TX) and Vice Chairman Bill Barrett (R-NE) had told Agriculture Secretary Dan Glickman of their "deep concern" over the timing and process for changes to the loan deficiency payment (LDP) program. Any changes should "do no harm," they told Glickman.

Their Friday letter was one of several that have gone from Capitol Hill to USDA over the proposed change. "We believe it is a fundamental mistake in the development of policy to move forward with what are rumored to be drastic changes to a program critical to the farm safety net without first seeking input from those your decision would most profoundly impact," said Combest and Barrett.

Two principles should form the basis for any LDP changes, they added. Modifications must meet the legal requirement to minimize forfeitures and stocks accumulation, and any change should be fair and work to strengthen the financial safety net for all farmers.

Rep. Gil Gutknecht (R-MN) also expressed disappointment at the proposed change to a national daily average LDP. "In an attempt to make this critical program simple for the USDA bureaucracy, you plan to punish the very people who are already disadvantaged," he said, also in a letter dated Friday.

"I cannot understand why USDA would implement a policy which would not only distort markets but also create a system of winners and losers," Gutknecht continued. "To move forward with such a dramatic change to the LDP without proper consultation with the nation's farmers will only make matters worse."

Time may be working against any change for this crop year, says PRO FARMER. If a change is to be made, it probably will come this week. Winter wheat farmers need to know soon what the LDP will look like for 1999. PRO FARMER says in low price years such as 1999-2000 is shaping up to be the only way producers in "wide-basis areas" will be able to maximize returns is through the marketing loan.

Combest and Barrett said with planting decisions based in part on farmers' understanding of the current LDP and the marketing protection is offers, "we question the fairness of a policy that would change horses in mid-stream."