Farm Bill: What's Next

July 12, 2013 08:07 AM

via a special arrangement with Informa Economics, Inc.

Insights and perspective on the farm bill saga and the outlook ahead

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

Getting a farm bill finally through the House of Representatives exposed a lot of things that have changed in Washington and, perhaps more importantly, what has not changed in some farm organizations and groups.

How the House finally got a farm bill approved. It was muscle-type pressure on wayward Republicans, including six Committee chairmen who voted against the bill in late June. This time saw Majority Leader Eric Cantor (R-Va.) returning to his former role as Whip to help get most of the 62 Republicans who voted against the bill in June to alter their position this time. Having Speaker John Boehner (R-Ohio) and Cantor clearly up front and center on pushing the bill meant they scored a victory on the bill's approval. Mike Sommers, Boehner's chief of staff, earlier this week told a teleconference of farm group lobbyists what they needed to hear: support this bill or there would be no other chance to avoid another extension. Most but not all of those lobbyists answered that call for support. Meanwhile, House Ag Chairman Frank Lucas (R-Okla.) is also in the winner's circle, as lawmakers and others truly felt sorry for the very accommodating lawmaker when the bill went down to defeat in June, only to see Lucas help GOP leadership pick up the pieces.

Farm group lobbyists. The House farm bill was approved despite active opposition from the American Farm Bureau Federation and the National Farmers Union. This is vivid proof of the growing lack of clout of farm group lobbyists. Some commodity groups actively supported the House farm bill, some with reservations, and those included cotton, rice, peanuts and fresh produce. The National Corn Growers Association (NCGA), which clearly favors the Senate farm bill versus the House, endorsed the House bill at the last minute as a means to get a conference panel started. "We urge members of the House to approve the bill and we expect immediate action by a conference committee to secure a five-year farm bill we can support," the corn growers said prior to the House vote. "However," NCGA added, "our action in no way reflects our approval of its contents or the manner in which it came to the floor. Unless significant change is made to the bill in the conference committee, we will strongly urge its rejection by the Senate and the House." The NCGA favors the Senate Ag Risk Coverage (ACR) safety net, also called shallow loss payments, that is based on planted acres, but insists that target prices, favored by rice and peanuts growers and some corn and soybean growers beyond the "I" states, be determined on base acres. The House farm bill sets target price payments based on planted acres up to base acres.

Now what? No one with any credibility knows what the final step will look like for the farm bill end zone. For example, it could be some time before conferees, especially in the House, are officially announced, or when a conference officially begins. In sensitive bills, when conferees are announced usually means that most of the issues have been addressed in closed-door sessions and mostly by staffers.

The issue of food stamp funding remains a key. The Senate-passed bill includes SNAP/food stamp cuts of $4 billion. The House farm bill excluded the nutrition title. An issue in the House is when and how a separate nutrition spending bill will surface. While some say within a week or two, veteran observers do not see any floor action until after the August recess. All sorts of farm bill conference options can be in play, including what happens to food stamp funding. The final decision on that topic will be decided by House and Senate leaders beyond the Ag panel, with consultation with the White House. If no agreement can be reached, then the issue will be whether or not Senate farm bill conferees – and House GOP conservatives – would go along with a farm program-only conference report, and whether or not there would be enough votes to clear any such report. There could be enough Democratic votes in the House to overcome likely stiff GOP conservative member resistance. Another option could be to link whatever farm bill conference report emerges with another must-pass conference reports, perhaps an expected short-term hike in the debt-limit ceiling. This could give some lawmakers cover to vote for the package where they might not do otherwise if there was a stand-alone farm bill conference report.

Other issues in the coming farm bill conference include Senate-House differences on target price levels, how those payments are determined, dairy policy (Senate bill contains supply management wheres the House does not), conservation compliance linkage with crop insurance, and means testing for crop insurance payments (in the Senate but not the House farm bill). Let's take a look at some of those issues.

Nutrition funding. If no final agreement can be found, note the following:

Supplemental Nutrition Assistance Program (SNAP)

Except as noted below, the programs of the supplemental nutrition assistance program, and food distribution programs authorized by the Food and Nutrition Act of 2008, the emergency food assistance program authorized by the Emergency Food Assistance Act of 1983, and the commodity supplemental food program, authorized by the Agriculture and Consumer Protection Act of 1973, would be largely unaffected if neither a new farm bill nor an extension of the current farm bill were enacted by September 30, 2013.

§ 25(h), Food and Nutrition Act of 2008, increases access to healthy, affordable foods to underserved communities;

§ 27, Food and Nutrition Act of 2008, authorizes through FY 2012 purchase of commodities for Emergency Food Assistance Program;

§ 209, Emergency Food Assistance Act of 1983, authorizes the Secretary to make grants to entities to increase distribution of perishable food products;

§ 4405, Food, Conservation, and Energy Act of 2008, funding for Hunger Free Communities program.

Crop insurance. While the two pending farm bills would increase funding for crop insurance, most of that additional funding is a result of moving the cotton program from Title I into the crop insurance title via STAX. Of note were comments from House Budget Chairman Paul Ryan (R-Wis.) who this time voted for the farm bill, unlike his no vote in June. Ryan, along with five other committee chairmen, had voted against the farm bill when it came up and failed on the floor in June. "There are some good ideas in here, and we should act on them. Now, I still have serious concerns with this bill. But I’m hopeful that a conference agreement will address these concerns," Ryan said in his written comments. He said that if the House-Senate conference report does not address his issues with the bill, he will vote "no." Ryan said that the farm bill should impose limitations to prevent wealthy farmers from receiving crop insurance subsidies. The Senate bill has some income limitations and Ryan said he has been "given assurances that the House will be able to speak on this issue." Of note, Ryan added he "will consider supporting a conference agreement only if it includes an AGI limitation or equivalent reforms." The full Senate agreed over the objections of Agriculture Committee leaders to reduce crop insurance subsidies for farmers making more than $750,000 per year. The House farm bill did not contain the reform.

Permanent legislation. Perhaps one of if not the major reform in the House-passed bill is that it repeals portions of permanent 1938 and 1949 law that sets commodity support and other agricultural support levels, and which is considered outdated -- despite support of those outdated laws by most farm groups and the Farm Bureau. Under current law, these permanent laws are suspended when new multi-year farm bills are in effect. Because it does not include an expiration date, the House-passed farm bill's commodity title becomes the new permanent law.

It will be interesting to see what the Obama administration has to say about the new permanent legislation language in the House and not the Senate. Why? The following is what USDA Secretary Tom Vilsack and his Department had to say last year about the possibility of reverting to permanent legislation (1938 and 1949 laws): Link

Reference reports. The following Congressional Research Service (CRS) reports provide background on lingering farm bill issues.

Link to What is a Farm Bill?

Link to Budget Issues Shaping a Farm Bill in 2013

Link to Expiration and Possible Extension of the 2008 Farm Bill


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






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