Bush Signs One Year 10-Acre Farm Bill 'Fix'

October 13, 2008 07:00 PM
 

via a special arrangement with Informa Economics, Inc.

Peterson to push for more permanent solution in next Congress


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


President George Bush on Monday signed a bill (HR 6849) that amends the commodity provisions of the 2008 Farm Bill to permit producers, for the 2008-crop season, to aggregate base acres and reconstitute farms to avoid the prohibition on receiving direct payments, counter-cyclical payments, or average crop revenue election payments when the sum of the base acres of a farm is 10 acres or less, and for other purposes.

Background: The House and Senate in late September approved legislation that temporarily suspends a payment provision in the farm bill that was the focus of a dispute between Congress and the Bush administration. The language suspends for one year a requirement in the farm bill enacted in June that prevents farmers from qualifying for direct, counter-cyclical or average crop revenue election program payments if they have a total of 10 base acres or less.

Lawmakers had originally intended to amend the law to clarify that aggregation is allowed, but the challenge of finding offsets to pay for the change prompted the temporary fix.

Details of the new law: Specifically, the legislation suspends for crop year 2008 the provision of the farm bill that prohibits direct and counter cyclical payments on commodities and peanuts if the sum of the base acres on the farm is 10 acres or less.

The legislation also extends the 2008 crop year signup for the small-acreage producers until the later of November 14, 2008 or 45 days after enactment for direct and counter cyclical payments. The bill ensures that no penalty to benefits can be assessed by USDA against producers who fell into this 10-acre prohibition for failure to submit reports or timely comply with other program requirements if using the extended sign up period.

The bill also contains clarifications on various aspects of the new standing disaster assistance program, mostly having to do with how minor acreages and grazing land are supposed to be treated under the program.

There is also a newly established minimum loss threshold under the program, requiring that there be a physical loss of at least 10 percent of one crop on the farm to qualify for payments, to avoid having farmers qualify for payments only due to a reduction in prices.

Budget offsets:

Section 1 of the new law has a provision that requires USDA to not implement the restriction on paying out direct and counter-cyclical payments on base acres totaling 10 acres or less. It deals only with payments for the 2008 crop year. This provision costs $9 million.

Section 2 of the package contains clarifications on various aspects of the new standing disaster assistance program, mostly having to do with how minor acreages and grazing land is supposed to be treated under the program. There is also a newly established minimum loss threshold under the program, requiring that there be a physical loss of at least 10 percent of one crop on the farm to qualify for payments, to avoid having farmers qualify for payments only due to a reduction in prices. Some of these fixes are judged by the Congressional Budget Office (CBO) to slightly increase payouts under the program, and some of them are deemed to slightly decrease payments under the program. The net impact of these changes is to spend $3 million less on the Supplemental Revenue Assistance Payment (SURE) than previously estimated under the 2008 farm bill.

The balance of the offset for Section 1 is achieved by reducing funds available for computer upgrades for the Risk Management Agency by $6 million in Fiscal Year 2011.

A more permanent solution ahead. House Agriculture Chairman Collin Peterson (D-Minn.) said he intends to change the law to allow for aggregation in the next Congress.


Comments: Once again lawmakers have learned -- or should have learned -- that in writing legislative language, they should be as specific as possible in some cases.

This has been just another skirmish between the Executive and Legislative branch of government in implementing the 2008 Farm Bill. Next up is how USDA and the Office of Management and Budget determine which crop years to use for implementing the Average Crop Revenue Election (ACRE) program for the 2009 crops.

 


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

Back to news

Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close