US Farm Bill

EXTERNAL FACTORS COMPLICATE PASSAGE

maneuvering a farm bill through the US Congress is always a challenge that depends on coalition-building within and outside agriculture, but passage this year is further complicated by U.S. elections, budget battles, the Tea Party agenda, and drought.

The US Senate approved its renewal plan (S. 3240) on June 21, and the House Agriculture Committee reported out its version (H.R. 6083) on July 12 — and there things stalled.

Failure to move H.R. 6083 through House passage before the August recess leaves the House with eight days in September and five in October for legislative work, allowing precious little time to debate and pass a bill.

Assuming it succeeds, the next step will be a conference committee to iron out differences between the House and Senate versions, followed by votes on the final conference report in both houses — an even more challenging task to complete before the November 6 election.

Elections limit the number of work days available, and they further complicate the government process as farm policy becomes one more partisan weapon in the campaigns.

While there’s widespread pressure on candidates to control the federal budget, incumbents with large farm constituencies really don’t want to make unpopular cuts in farm programs just a month before the elections. For them, it may be better to delay votes to a post-election lame-duck session.

But delays also come at a cost, especially because of the drought. Late July saw Democrats in a hue-and-cry against the House Republican leadership for its failure to move on farm programs in the face of drought, while US Agriculture Secretary Tom Vilsack reminded listeners that the USDA’s ability to help affected livestock producers is limited because Congress has not yet renewed the Livestock Disaster Assistance Program.

There’s another wrinkle to the budget issue that further complicates things. Drought assistance means massive payouts, but USDA, like other federal agencies, faces an automatic round of sharp budget cuts this winter.  Meanwhile, other powerful interest groups are looking for ways to preserve funding in areas like defense by shifting some of their cuts to other departments like agriculture.

Then there’s the Tea Party. Many Tea Party sources are calling for much more drastic cuts in farm program spending than the House and Senate versions of the bill offer, and some Tea Partiers want outright defeat of the bill. 

One suggested tactic would divide agricultural programs and nutrition/food assistance programs into two separate bills, effectively severing the long-standing alliance between farm groups and food aid groups that has provided essential urban support for past farm bills.

Despite this can of worms, there’s one other factor that makes final farm bill passage highly likely: the price tag for reverting to the United States’ permanent farm law. In recent decades, farm bills have only temporarily superseded the permanent law, created in the 1930s and 1940s for a very different agricultural economy. 

US permanent farm law could increase the wheat support price from $2.94 to $13.13 per bushel. The rice support would jump from $6.50 per hundredweight to $20.15. Milk’s indirect support price would shoot from $9.90 per hundredweight to $37.28.

The current farm bill expires on September 30. As time gets short, and if House passage of H.R. 6083 looks uncertain, Congress could pass a short-term extension of the current law, perhaps for one year or possibly for just long enough to complete final passage during a post-election lame-duck session.

This appears unlikely, however, since an extension proposed by House leadership just before the August recess was summarily squelched by Democrats who wanted a commitment to debate the full farm bill in September and by Republicans unwilling to make such a commitment.

Action is more likely after the elections, when savings of $25 to $30 billion in the new bill could be tapped to offset tax changes that must be resolved before year’s end. 

So there are no guarantees of what the final 2012 farm law will look like, but some changes appear in both the House and Senate versions and are therefore likely to survive, especially if they promise budget savings.

Direct payments, countercyclical payments, the Average Crop Revenue Election (ACRE) Program and Supplemental Revenue Assistance Payments are slated for the ax in both bills, as the committees move toward greater reliance on crop insurance to support farmers during difficult years.  The bills do not agree, however, on changes in risk management programs to supplement crop insurance, with the Senate calling for a single Ag Risk Coverage Program and the House offering a Price Loss Coverage plan and a Revenue Loss Coverage plan.

Marketing loans are generally unchanged except in the case of cotton.

Livestock Supplemental Disaster assistance is reauthorized.

Dairy programs are reconfigured into a single voluntary risk management program (House) or a pair of     programs (Senate).

Three of the most popular conservation programs – the Conservation Reserve Program (CRP), Conservation Stewardship Program (CSP) and Environmental Quality Incentives Program (EQIP) are renewed, and the USDA’s current 23 conservation programs are consolidated into 13 programs (House) or four programs (Senate).

Four key trade programs – GSM-102 credit guarantees, the Market Access Program, the Foreign Market Development Program, and Technical Assistance for Specialty Crops – are renewed in both bills.

Expect fights over food assistance programs (the largest single portion of USDA’s budget), energy programs (where the Senate continues current programs but the House eliminates mandatory funding), and Senate efforts to end program payments to wealthy farmers. •