Indiana farmers are waiting on Congress to determine whether it will make changes to a program that provides financial assistance for storing crops.
The Commodity Loan Program gives farmers money to store their crops for several months after harvest rather than selling them immediately. That helps keep prices lower later in the year when there is typically a lower supply of corn and soybeans on the market, but just as much demand.
It also benefits farmers because even though they have to pay the loans back, they can sell their crop at higher prices than they could have earlier in the year.
But how much money farmers get is tied to the farm bill, and with the stalemate in Washington, Congress let the farm bill expire on the first of this month and is expected to pass a new one in the coming months.
Some farmers like Martinsville farmer Jeremy Bright would like to see the program go away entirely. Because he says the money the government pays hasn’t keep up with market price.
“Nowadays you just don’t see hardly anybody using that program, because corn is above $4, even up to the $5 range, and even we have seen $6 and $7 corn during past three years,” he says. “So why would you want to put it in the bin and only collect a $1.85. You might as well sell it and collect $5 or $6 or $7”
Bright says with how high crop prices have been, the government simply doesn’t have the money or isn’t willing to match market price.
But Indiana Farm Bureau President Don Villwock says it’s more complicated than that.
“We are not allowed to have a high loan rate, because if you get the loan rate too high, it distorts the market,” he says. “The farmers would be planting for the government loan rather than markets. And we don’t want that to happen. “
Villwock estimates there are still 30 percent to 40 percent of farmers using the commodity loan program statewide.