What is in this article?:
- Southern growers not supporting revenue-based farm bill policy
- Lack of support from Southern growers
• The goal is to have a conferenced bill by Thanksgiving. The main hurdles that have kept a farm bill from being passed a year ago are the Nutrition title and the Commodities title.
Lack of support from Southern growers
Southern growers have not supported these revenue-based programs and prefer a program similar to the current Counter-cyclical Payments (CCP) program.
The 2013 Senate bill has an Adverse Market Payments (AMP) program thanks to Thad Cochran of Mississippi taking over the ranking member of the Senate Ag committee, and the House has a Price Loss Coverage (PLC) program.
Basically, the Senate and House have similar programs, but the corn and soybean growers favor the revenue-based program.
The revenue-based programs are designed to work best with revenue insurance and that is an issue in the South for commodities that are heavily irrigated like peanuts and rice, where revenue insurance is not as popular or even available in the case of peanuts.
Those are the main issues to be negotiated in order to get a farm bill passed. I think there is a better chance of one passing because another extension is not desirable. If an extension were to be passed it is quite possible direct payments would be cut deeply or out altogether.
The Congressional Budget Office (CBO) would come out with a new baseline in the spring which could have a lower baseline that is currently being used. The CBO scores the projected cost of farm bill programs. The CBO baseline is an estimate (projection) at a particular point in time of what federal spending on mandatory programs likely would be under current law.
Congress is working under a procedural rule that they can’t increase mandatory spending without offsetting it somewhere else or generating new revenue with a tax increase.
Also, cutting direct payments in the extension would result in a lower baseline for 2014 negotiations. But who knows what will happen. Whatever the final version looks like, it is going to be a big education effort as the new programs will be crop insurance based.
The short of it is the conference is now finally meeting and in order to get a farm bill passed, compromises need to be found in the Nutrition and Commodities titles for dairy and the revenue and price based commodity programs.
An extension is viewed as not desirable but may happen. Also, the House version would make the 2013 farm bill permanent legislation, meaning if a new one is not passed in the future then the 2013 bill would remain in place instead of going back to 1938 and 1949 legislation.