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RSS By: Chip Flory, Pro Farmer

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Dairy policy is a final farm bill hurdle

Jan 10, 2014

Pro Farmer Extra

- From the Editors of Pro Farmer newsletter -

January 10, 2014

Today's perspective is provided by Pro Farmer Washington Consultant Jim Wiesemeyer and Pro Farmer Associate Editor Meghan Pedersen:

Dairy policy a political issue?

Farm bill conference efforts are thought to be in their final stages. Ironically the most contentious end-of-process issue is not the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) but rather dairy policy. Conference members have reportedly agreed to cut $8.8 billion from SNAP funding over 10 years, including some language dealing with “able bodied worker requirements.”

The struggle over dairy policy has shown signs it may become an election-year, political issue, with both sides privately wondering which party would be blamed the most for a farm bill conference report failure.

At the center of the debate is Rep. Collin Peterson (D-Minn.), ranking member of the House ag panel who is pushing dairy supply management language, and House Speaker John Boehner (R-Ohio), who continues to insist that no such language be in the final conference package. Boehner has reportedly said he would not bring up the farm bill conference report for consideration on the House floor if it includes dairy supply management language.

Meanwhile, House Ag Committee and Conference Chair Frank Lucas (R-Okla.) laments he is “dealing with forces that are so diametrically opposed with such intensity, who are operating from positions of personal knowledge and experience.” And Sen. Patrick Leahy (D-Vt.) is reportedly working on various dairy policy options and having them scored by the Congressional Budget Office (CBO) to skirt the dairy policy hurdle.

If Peterson doesn’t get his way on dairy policy, the question is, will he vote “no” for the overall conference report because of just one issue? If so, how many Democratic members would follow suit?

Farm bill conferee Rep. Jim Costa (D-Calif.), says farm bill negotiators should call Boehner’s “bluff.” With most conservative Republicans expected to vote no on any coming farm bill conference report, the measure will need more than a few Democratic votes to win House approval.

Of note, members of both parties soundly approved a provision that deleted supply management language from dairy policy during the House farm bill debate.
Country-of-origin labeling (COOL) is another issue yet to be decided. Sources indicate this could be decided via a vote among all conference panel members. Actively engaged language is another uncertainty.

Farm bill “certainties”

  • Direct payments eliminated
  • Base acres used for calculating Ag Risk Coverage (ARC) & Price Loss Coverage (PLC) target price payments
  • House’s target price levels will be used for PLC
  • Crop insurance linked to conservation compliance
  • No means test for crop insurance
  • Transition (direct) payment likely in 2014 cotton instead of Stacked Income Protection (STAX) program


What if it all falls apart?

If conference efforts fail, necessitating a one- or two-year extension of the 2008 Farm Bill, a coming CBO baseline update in early February could show corn growers might garner billion of dollars in payments via an attractive Average Crop Revenue Election (ACRE) program for the 2014 crop safety net option. If so, that could limit the decline in corn plantings some are forecasting. But that would also clearly show ACRE skews plantings. This would be noticed by several World Trade Organization (WTO) member countries. It also underscores why deferring a farm bill much longer will make it even more difficult.



Follow Pro Farmer Editor Chip Flory on Twitter: @ChipFlory

To see more of what Pro Farmer has to offer, be sure to visit www.profarmer.com.

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