Farm Bill Update

December 9, 2011 02:03 AM
 
Untitled Document

via a special arrangement with Informa Economics, Inc.

Timing of new bill | Planted or base acres? | Target (reference) prices

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


The following are updates on some farm bill issues ahead:

  • Timing of new farm bill: 2011, 2012 or 2013? Sources in and outside Congress are split on this topic. Some think a largely dysfunctional Congress will not likely complete the omnibus bill until 2013, while others think the process will be completed sometime in 2012 – perhaps during a lame-duck session after the Nov. 2012 elections. Some Democrats, including Rep. Collin Peterson (D-Minn.), hope that the farm bill could still be completed this year, as a budget offset for late-year spending, but most sources give this possible but not probably possibility low odds. If the Republicans gain control of the Senate following 2012 elections, that would mean a new Senate Ag Committee Chairman, likely Sen. Pat Roberts (R-Kan.) and would definitely extend the debate if not produce major changes in the measure. Meanwhile, if the farm bill is not completed by the end of September, a “simple” farm bill extension may not be so simple, with scores of lawmakers likely wanting to offer amendments, and thus a farm bill debate. Those thinking 2012 will produce a farm bill (either before or after the elections) say Congress will not do much anyway, so having an extended debate on the House and Senate floor is very doable.

  • Updating acreage bases could be one farm bill change. The aborted farm bill-Super Committee linkage may force some major changes when lawmakers go to a more open debate in 2012. One possibility, sources say, is to move away from the draft bill that would have made payments on planted acres (not to exceed base) and instead, give producers the option to update their bases. Nothing official on this at this juncture. The move away from planted acres could avoid some potential WTO problems, contacts advise. However, any move to update base aces could significantly increase costs, as some crops, namely soybeans, would see more acres eligible for payments.

  • How were target price (reference price) increases in new farm bill established? Some farm bill writers prefer the term “reference price” to target prices, relative to the new farm bill, as they will be a feature of both the traditional target price program, or the coming Ag Risk Coverage (ARC) program. Extensive research was done by Ag Committee staffers regarding the push to increase current target price levels, contacts advise. The levels were not just based on cost of production, but a look back at the target price relationship to prices. Also, both revenue and costs were used to come up with recommended increases, sources added.



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


 


 

 

 

 

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