Constructing a New Farm Bill

April 20, 2010 07:00 PM

Roger Bernard, Farm Journal Policy & Washington Editor

The 2012 Farm Bill. That phrase seems like a place well into the future. But in reality, or at least in the terms of a farm bill, constructing a new bill is a lot like road work season -- you wonder if it is ever gonna end once it's started

Today marks essentially the "start" of the process for the next farm bill. While yes, the hearing on dairy policy held in Pennsylvania Tuesday was really the first farm bill hearing, today's session before the House Ag Committee will be viewed by many as the "first" farm bill hearing.

That's in part as it features USDA Secretary Tom Vilsack. The current USDA Secretary is often the first "witness" that an agriculture committee will have as they start the process of putting together a new omnibus farm bill. This session is one that typically features a sort of "snapshot" of U.S. agriculture in the form of what the economic landscape is facing farmers. It's a landscape that has seen a start to the 2010 growing season that has corn planting advancing at the quickest pace since 2004.

So what will Vilsack say? A release from USDA said Vilsack will present a "national perspective on the challenges facing rural America based on his travels to rural communities throughout the country." The release also notes Vilsack will talk about the need for a "strong farm safety net, and new approaches to create income opportunities and generate wealth in a stronger, more prosperous rural America for generations to come."

Those "new approaches" will be the key to what Vilsack testifies on tomorrow. Or at least, that will provide some idea from the Obama administration as to what they see as a package of farm programs and policies that should be pursued in the next bill. Will that list be very specific? Probably not. Although administrations have surprised us (and Congress) in the past, most notably the Bush administration in their submission of an actual bill to Congress. As a whole, their proposals went nowhere, but they could claim some victory in that some similar provisions made into the final version of the 2008 Farm Bill.

Budget, budget, budget. While House Ag Committee Chairman Collin Peterson (D-Minn.) didn't spend a lot of time in his session with reporters Friday focusing on the budget, that will be a major force in the final bill. Peterson spent little time addressing the budget situation he believes the baseline will shift a lot in the coming months as the farm bill process unfolds. He's right. It will shift.

Some of those shifts will come via the Congressional Budget Office (CBO). What they assume for prices, etc., will have a lot of impact on the baseline. If they assume lower prices, then that baseline could edge higher. But even a slightly higher baseline doesn't mean agriculture will be working with a bigger pool of money to write the 2012 Farm Bill with than they did for the 2008 Farm Bill.

Why? Because there are several programs that do not run the full term of the 2008 Farm Bill. Some programs, like the Supplemental Revenue Assistance program (SURE), the new disaster bill authorized by the 2008 Bill, ends with the 2011 crop season, but many other programs continue through the 2012 crop year.

Why is that important? If a program isn't present in 2012, it loses its place in the baseline. That means those dollars aren't there in a new baseline. In all, it's estimated that around $9 billion worth of programs come to end prior to the conclusion of the 2008 Farm Bill.

And there's the crop insurance program. The Obama administration has signaled that they want to cut billions of dollars from the program via a renegotiation of the standard reinsurance agreement (SRA). But lawmakers are now warning the administration not to take that step. Their fear? If those dollars are cut from the program now, lawmakers won't get a chance to reap any budget savings in the new farm bill.

So the bottom line remains that the long and winding farm bill road is getting under construction today. And starting that construction process now is very timely. Remember, the 2008 Farm Bill was really supposed to be the 2007 Farm Bill.


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