For those of us who have lived through more than a few of the “farm bill wars,” there’s a distinctive din surrounding the talk of the 2012 legislation. In past years, it was many times about preserving the status quo, or possibly even improving the safety net or revenue programs for farmers.
That’s not the case this time around, and the rumbling thus far is unsettling, to say the least.
So what’s to blame for this especially dismal farm bill outlook? One of the culprits, amazingly, is higher commodity prices.
That’s right, higher commodity prices. Before you get too excited about $1 cotton, $5.50 corn, $10 soybeans and possibly better-than-average peanut prices, consider the irony that this current good fortune potentially could lead to a farm bill that’ll please almost no one, at least in the farming community.
Speaking at the recent Southern Region Agricultural Outlook Conference in Atlanta, Texas A&M University’s Joe Outlaw said that higher commodity prices now could mean there won’t be any LDP’s or CCP’s, so the baseline will be smaller and there will be less money to go around in a new farm bill.
“The budget for the next baseline will be smaller because prices are high,” he says. “All of the money that’ll be in there — more or less — has to be in the direct payment, which already has a big bull’s eye on it. Based on USDA’s outlook, there are only two crops at the moment that are anywhere near going towards larger CCP’s or LDP’s going forward.”
As for direct payments, what policy-makers need to understand, says Outlaw, is that without them, there will be no cash flow, which means that a lot of farmers wouldn’t be able to secure annual operating loans.
Of course, it’s all conjecture at these point, considering that the current bill doesn’t expire until 2012, but some major themes are already emerging, and the economic climate won’t likely improve significantly by the time all is said and done. It’s interesting to note that commodities took a large hit in the last farm bill, and the budget deficit at the time wasn’t nearly the concern it is today.
“We have a huge deficit, obviously. And it doesn’t matter at this point if you’re a Republican or a Democrat. If you want to make a change to the program, the deficit is a solid basis for saying that you have to cut the budget. Some people are using this, and they don’t care anything at all about farm programs.”
The process already has begun, says Outlaw, and when you take a look at the President’s budget, you see more of the same. “It doesn’t matter if it’s Obama or Bush, there are payment limits, restrictions on the amount of money going out, and more targeted funding.”
Compounding the obvious economic factors is a disturbing lack of interest among politicians and others in anything having to do with production agriculture.
Outlaw says growers often ask him why all of this “nutrition stuff” is in the farm bill, and they complain about how much money such programs are taking away from commodities. “You wouldn’t have this bill at all if not for the nutrition title because you wouldn’t have enough votes,” he says.
Whenever the next farm bill is finalized, Outlaw says he doesn’t think the word “farm” will even be in the title of the new legislation. “I’m not sure anything about production agriculture will be in the title. My bet would be that ‘organic’ will be in the title.”
When he first starting going to Washington, D.C., to work on agricultural issues, Outlaw — who is co-director of the Agricultural and Food Policy Center at Texas A&M — says that about 40 people would meet from the U.S. House of Representatives to discuss farm policy. “Now, if you want to have a meeting on agricultural issues in the House, you might be able to get five people to come together who actually care about and understand agriculture. Everyone thinks they have a person who cares, understands, and will go to bat for agriculture. But there are very few left.”
Bipartisanship is also a thing of the past in Washington, he says, and that makes the process more difficult. “It used to be that when we went to D.C., we’d sit down with the entire committee staff from the House and the entire committee staff from the Senate, Republicans and Democrats. Now, the parties meet separately.”
Unfortunately, considering the current climate — both economically and politically — commodity programs have nowhere to go but down in the next farm bill.