Super committee could play a key role in the next version of U.S. farm policy
As farmers pushed to bring in the harvest this fall, farm and commodity organizations were collecting their thoughts on the next version of U.S. farm policy. Farm-state lawmakers are gearing up to write the next farm bill in a budget storm like none of them have experienced before.
The farm bill could likely be part of a package of budget cuts that totals at least $1.2 trillion. That is, if the super committee of lawmakers assembled under the debt plan signed into law this summer can agree on a package of cuts and then find enough House and Senate members to support its decision.
On the Chopping Block. A key unknown at this juncture is where agriculture spending will be cut. Farm and commodity groups, such as the American Farm Bureau Federation (AFBF), have not shied away from including nutrition programs in the lineup of cuts.
Crop insurance is another area lawmakers have been eyeing to cut. But the program has already lost $6 billion during the Barack Obama administration. Regardless, AFBF talks about additional reductions, except when it comes to farmer crop insurance premium subsidies.
Always in the spotlight, direct payments are likely to suffer reductions in the budget process. Some lawmakers, though, are claiming direct payments are a lifeline for producers in areas gripped by intense drought, such as Texas and Oklahoma.
Don’t forget that the chairman of the House Ag Committee is none other than Rep. Frank Lucas (R-Okla.). His constituents have directly benefited from direct payments and are also used to waiting for payments from the disaster program in the 2008 farm bill, the Supplemental Revenue Assistance Payments program (SURE). Crop losses suffered this year won’t be paid for until 2013.
Will considering the weather-inflicted areas be enough to keep direct payments intact? No, but
it will help answer the popular question: Why are direct payments necessary with high farm prices?
Then there are ethanol subsidies, which are due to expire at the end of 2011. Because they’re on deck to end, there’s no budget savings lawmakers can claim.
Farm Bill Inclusions. What’s also likely in the potential farm bill package is a reconfiguration of the SURE and Average Crop Revenue Election (ACRE) programs. SURE supporters such as Sen. Kent Conrad (D-N.D.) have offered up plans to improve the program, and even rename it. On the flip side, Sen. Mike Johanns (R-Neb.) agrees with farmers who don’t favor a program structured in such a way that payments come long after the fact. Still, Conrad is a key player as chairman of the Senate Budget Committee, so his wants will be heard.
As for ACRE, many want guarantee triggers closer to the farm—by county or crop district—among other changes, to simplify what has been a complex program.
Money Matters. Key to any of these adjustments, in light of the current budget situation, will be the money at stake. Lawmakers will have to find funds in other program areas to pay for the changes they want. That’s where the super committee enters the picture.
While some fear this process, farm-state lawmakers will still have a role in what happens relative to agriculture spending. They will count on super committee member Sen. Max Baucus (D-Mont.) to watch out for agriculture.
What will happen to the farm bill as a result of the super committee? "The honest answer is, we don’t know," says House Ag Committee ranking member Collin Peterson (D-Minn.). "We have no number. The process is unclear."
If the farm bill is wrapped into any super committee plan, it could be protected from change—which is good because, given the state of the economy, it’s bound to encounter resistance in the Senate and, in particular, the House.
Formerly Policy and Washington Editor for Farm Journal, Roger Bernard is now policy analyst for Informa Economics, contributing to Informa products such as Issue Monitor (www.iemonitor.com).
- November 2011