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2012 Farm Bill: It Still Could Happen

August 16, 2012
By: Ed Clark, Top Producer Business and Issues Editor

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At least one prominent lobbyist believes Congress will pass a farm bill this year, though it may not include disaster payments for the livestock industry


Political naysayers, step aside. A farm bill is still likely by the end of 2012, despite heated barbs from both sides of the aisle, according to one prominent lobbying influence. If it doesn’t happen in the small number of working days prior to the election, less probable, perhaps, "they have to do it in the lame duck session before the end of the year," says Michael Parrish, director of government affairs for Monsanto.

While optimistic Congress will pass a new farm law this year, Parrish is uncertain whether the bill will include disaster payments for livestock producers, retroactive to 2012. That’s because the farm bill that has passed the Senate contains disaster benefits, while the bill passed by the House Agriculture Committee does not. Parrish spoke at the Yield Chasers Ag Academy in Redwood Falls, Minn., sponsored by DeKalb and Asgrow, and Farm Journal Media.

Holding up passage of the farm bill in the House is not agricultural provisions but sharp disputes over nutrition assistance, which comprise 80% of the farm bill’s cost. One in 10 Americans receives nutrition assistance. Parrish believes the pointed disputes on that issue will be resolved and the bill will pass the House. Differences must then be ironed out in a Senate-House conference committee.

As important as what Congress will do, perhaps, is what it will not. The final bill will not contain is any cap on crop insurance subsidies by size of operation or income level, Parrish believes. "This will be one of the major fights in the next farm bill, however."

Parrish notes that the Environmental Working Group, a critic of direct payments, immediately shifted its emphasis to crop insurance subsidies once direct payments were stripped from the bills. He expects other critics of farm program spending to do the same, since crop insurance will be the major farm subsidy.

Parrish also does not believe the Environmental Protection Agency (EPA) will modify the Renewable Fuels Standard mandate this year, which calls for nearly 14 billion gallons of ethanol to be produced, using about 5 billion bushels of corn. He fully expects EPA to be hit with proposals for a waiver, however. If next year’s corn crop is again tight, however, the industry would be more vulnerable then to a reduction of the mandate, he Parrish states.

He adds that EPA did not reduce the mandate in 2008 when corn prices topped $7/bu. and there were calls, just like this year, for a mandate reduction. In addition, blenders can use past and future credits to offset ethanol use, so the mandate in 2012 could be achieved with less actual ethanol production.

Also, to relax the mandate, EPA would have to determine that it causes "economic harm and it’s not defined anywhere," Parrish says. Economic harm is a multi-year issue, he adds. Neither EPA nor Congress wants to touch the ethanol issue prior to the election, he continues. Lastly, it would take 90 days for EPA to rule on a waiver, and things can change dramatically in 90 days.

Read more farm bill coverage.

 

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