The trick to talking about the farm bill is trying to find something new to say about a process that has been dragging on for about two and a half years, says Texas A&M Extension Economist Steven Klose.
“Whenever we talk about farm policy, it’s the same old song,” said Klose at this week’s Southern Region Agricultural Outlook Conference in Atlanta.
Due to market conditions, current farm policy hasn’t played a large role recently, he says. “We haven’t talked about loan rates for a while now, and counter-cyclical payments are pretty much out of the picture right now.
“They’re all so down below the market that they don’t matter much anymore. Crop insurance is obviously a key. Our typical safety net stuff — the net’s so far down that if you fall from the trapeze, even the net is going to hurt.”
There’s a big perception that because of the recent run-up in commodity prices, we no longer need that safety net,” says Klose.
“There has been a run-up in some commodity prices, but not in all of them. There’s a perception out there that maybe we just don’t need a safety net, and that’s driving a lot of what’s going on and the delay in getting a bill finalized.”
A big problem, he continues, is that there’s really no room anymore in politics for someone in the middle.
“It used to be that being a moderate and being in the middle was a good thing. Now, it’s almost a dirty word to be called a moderate by either side. So the extremes of both parties are out on the edges, and neither wants the other to have a win, whatever a win may look like,” he says.
There also have been some differences among the commodity groups, fighting for what little money is available, he adds.
“But since when have they ever gotten along? In times of tight budgets, it just puts a magnifying glass on what’s going on, with the South against the Midwest and the white crops against the grain crop. When there’s not much many to be had, everyone will go for their share of the pot. That has delayed the process a bit, and it has been a factor.
Groups outside of agriculture like the Environmental Working Group (EWG) and others have other agendas and have influenced the process and may have contributed to the perception that farmers no longer need a safety net, says Klose.
In addition, some members of Congress are working on a farm bill for the first time, and they’re doing it in an environment that doesn’t make it easy.”
Looking at mandatory spending for the 2008 farm bill, Klose says there are 15 titles, but most of the money is spent in four places: commodity programs, conservation, trade and nutrition, with nutrition by far being the largest part of the spending.
“For all of the excitement associated with the commodity title, it is 0.15 percent of the U.S. budget,” says Klose.
Process currently at a standstill
To recap Congressional action so far, the Senate Agriculture Committee approved its version of an omnibus 2013 farm bill by a vote of 15-5 on May 14, 2013.
The next day, the House Agriculture Committee conducted markup of its own version of the farm bill and approved the amended bill by a vote of 36-10. Floor action on the Senate bill began during the week of May 20, and was completed on June 10, when the full Senate approved the bill by a vote of 66-27.
The full House considered it version of the farm bill during the week of June 17 and adopted numerous amendments before defeating the amended bill on June 20 by a vote of 195-234. Three weeks later, the full House debated a variation of the defeated bill that excluded a nutrition title but included all of the adopted floor amendments to all of the other titles.
This revised bill was approved by the House by a 216-208 vote.
A separate nutrition title was passed by the House in September by a vote of 217-210. It includes a $40 million cut to food stamps over the next decade. Conference on the two measures is pending.
“Technically, it wasn’t required to wait on the latest nutrition title vote to conference the two bills, but the House was sending a signal of the cuts that it’s expecting from the Senate,” says Klose.
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The Congressional Budget Office (CBO) projects that if the mandatory programs of the 2008 farm bill were to continue, they would cost $973 billion over the next 10 years. If enacted, the Senate-passed farm bill would reduce this baseline by $17.9 billion (-1.8 percent) over 10 years, of which $13.9 billion is attributed to agricultural programs and $4 billion to nutrition programs.
The House-passed bill which does not have a nutrition title would reduce the agriculture portion of the baseline by $12.9 billion (-6.2 percent).
“It’s safe to assume that whatever is eventually passed, there will be less of a safety net than in the current program. Crop insurance is going to become more important, and the farm bill provisions now being debated look more and more like crop insurance.
“There’s more interaction with crop insurance, so we’re moving more in that direction. It also means that this is the only place where we’re spending money. So if we’re going to cut, there’s not much left to cut unless they start cutting crop insurance.”
Klose says he’s not optimistic that a farm bill will be finished by the end of the year. “I wouldn’t give it a 50-percent chance of being finished by the end of the year.”
Sept. 30 will mark the end of the extension to the current farm law that was passed in January, he says.
“So we’ll come to the same cliff this time, but it’ll happen on Jan. 1, and it’ll be because of dairy, and the supports that expire at the end of the year. That’ll be the next time Congress absolutely has to get something done.”
With the House sending a signal that it wants $40 billion in food stamp cuts on nutrition, a compromise with the Senate doesn’t seem possible, he says. “I can easily see us trying to decide what to do next on Dec. 31.”
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