What is in this article?:
- Ag economist: Watch three Bs in 2012 farm bill
- Most compatible with WTO parameters
When the new Republican House majority takes up the farm bill issue, farmers should expect lawmakers to focus on three major areas: Brazil, budget and baseline.
Most compatible with WTO parameters
"After 15 years of giving out these payments, political champions to keep payments in their current form seem in short supply," Keeney said. "The irony of this is that the fixed direct payments made to producers are, by far, the most compatible with WTO parameters on allowable spending. So, we may have the WTO case with Brazil encouraging less spending on farm subsidies and the response being that we cut those favored by the WTO rules."
Legislative work in 2010 on the farm bill was aimed at locking in a baseline. Legislators thought farm bill spending had reached a minimum level and if the congressional committees moved ahead to write new legislation they could do so without participating in any larger budget reform process. That prospect seems less likely given the November elections, which turned over leadership in the House of Representatives and seems to indicate a more hawkish approach to budget cutting.
"Agriculture has successfully avoided budget cuts in the past and was trying to do so this time by adopting the minimal baseline and moving quickly to get a new bill," Keeney said. "The changeover in the House means that work was probably for naught and, given the legislative priorities of the new Congress, we are not likely to see new farm policy until after the 2012 election year."
Whenever work resumes on the successor to the 2008 farm bill, it is likely that the three Bs of budget, baseline and Brazil (i.e. agricultural trade) will be among the major influences that push for lower total spending on farm programs, Keeney said.