Ag Subcommittee Markup Not Final Say Re: Commodity Title

Today a House Ag subcommittee will markup the commodity title of the new farm bill. But whatever happens today will clearly not be the final say regarding commodity program provisions, which may change during late-June consideration by the full House Ag Committee, and if not, some provisions could definitely be debated and perhaps altered during House floor consideration later this year.

Commodity title already being changed. Had House Ag Committee Chairman Collin Peterson (D- Minn.) waited for the Congressional Budget Office (CBO) scoring of some controversial commodity title farm bill provisions, a slight cut in direct payments to help pay for some increases in loan rates and target prices would not have been included in the package unveiled, it seems hurriedly, late last Thursday.

CBO analysis has changed farm bill markup. CBO's analysis of all of the commodity title proposals revealed that the formula for calculating direct payments would not have to be altered at all to pay for the increases in some commodity target prices and loans rates. Instead, CBO concluded, the funding saved by banning payments to small farmers and the move to direct attribution for farm program payments (by far the bigger funding source) would be enough to offset the amber box, trade-distorting increases in loan rates and target prices.

So today's markup session may not be all that exciting. Chairman Peterson wants to make sure competing farm bill plans offered by others (from the Bush administration, Wisconsin Democrat Ron Kind, and a direct payment buyout plan from Citicorp. Inc.) are defeated in subcommittee action so they will lose clout if offered again on the House floor. That may be wishful thinking on the part of Peterson, who has been surprised several times during this year's omnibus farm bill debate.

Farm bill funding issues remain as the single most important topic and unknown. The big news would be if Republicans or any of the Blue Dog Democrats will insist on Chairman Peterson detailing exactly where the budget offsets are coming for the around $13 billion in additional farm bill spending already approved beyond the CBO farm bill budget baseline. If funny money offsets are eventually used, even a very weakened President George Bush will have clout in the farm bill debate -- by at least threatening to veto any measure that falls significantly short on reform and definitely if it including additional funding not offset by real cuts elsewhere.

Bottom line: We're a long ways away from knowing the final details of the farm bill debate. Consider today's commodity title provisions from the House Ag subcommittee as a work in progress, subject to lots of amendments and other hurdles in the months ahead.