Farm Bill Bind

November 28, 2012 04:04 PM

America’s farmers and ranchers need farm policy

The risk of Congress not passing a farm bill in the lame duck session has vast consequences for farmers and ranchers. "Without one, we would operate under the Agricultural Act of 1938," said Barry Flinchbaugh, an ag economist at Kansas State University. Flinchbaugh, who spoke at the National Agricultural Bankers Conference in November, said U.S. grains would be priced out of world markets. Domestic wheat prices would be $18 per bushel, corn $12 and soybeans $27. Prices would rise because the 1938 Act establishes non-recourse loans based on parity.

"I don’t think agriculture has woken up to this," Flinchbaugh said, adding that only the competition would benefit. However, crop insurance and Conservation Reserve Program payments are exempt from any sunset of the farm bill.

Flinchbaugh, critical of lawmakers on the left and the right, said failure to compromise has made it impossible for Congress to deal with issues such as taxes and spending, let alone the farm bill.

Flinchbaugh’s other issue is with lawmakers who want to strip food stamps from the farm bill.

Their thinking, he explained, is that it would make it easier to pass the farm bill because the biggest difference between the Senate and House versions concerns food stamps. "There are fewer than 50 ag districts out of the 435 congressional districts," Flinchbaugh said. "How are you going to pass a farm bill if all that’s in it is programs for farmers?"He added that 82% of USDA’s budget is for food and nutrition, but remove that and USDA will no longer be a Cabinet-level agency.

While Flinchbaugh sees a chance the farm bill will be passed during the lame duck session, it’s more likely we won’t see one until spring, and it will look a lot like the Senate’s present version.

Flinchbaugh said the House and Senate ag committee leadership is "as good as it gets," but weak leadership exists on both sides.

Beyond agriculture, he is concerned that U.S. bonds could be degraded to "BB" if the government does not get its fiscal house in order, and quickly. "The major issue is the fiscal cliff," he said.

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