LDP Limits Bill Introduced

February 23, 2001

Reps. Jo Ann Emerson (R-MO) and Marion Berry (D-AR) have introduced a bill to increase the payment limitations on loan deficiency payments (LDPs) and marketing loan gains (MLGs). The bill would amend the Food Security Act of 1985 to increase the maximum amount of LDP and MLG payments that a producer may receive during crop years 2001 and 2002 from $75,000 to $150,000. For the past two years Congress has increased payment limitations in response to significantly low commodity prices and weather disasters that just about wiped out a number of farmers' bottom lines.

The American Farm Bureau Federation says it appears "farm economy history will repeat itself as producers are facing a fourth straight year of significantly low income" in 2001. Last week, the Agriculture Department's top economist, Keith Collins, told the House Agriculture Committee that "under current legislation and programs, assuming no supplemental payments, net cash farm income in 2001 is projected to be at the lowest level since 1994 and about $4 billion below the average of the 1990s."

Collins also told the committee that further increasing opportunities for farmers in foreign markets is a substantial component of turning the farm economy around in the long-run, a position the AFBF supports. However, the Farm Bureau admits increasing payment limitations for LDPs and MLGs "is certainly no quick-fix." The increase "could offer an extra layer of financial security that would ensure today's farmers are able to enjoy tomorrow's foreign trading successes."