Once the House and Senate Approve Farm Bill, Then What?

June 7, 2012 03:17 AM

Regulatory route will still take time for provisions in bill, especially new ones, to reach farmers.

Much focus in Washington and in farm country is being put on the timing of when the House and Senate will finish a new farm bill along with details of what goes into the mammoth legislative package that looks to spend nearly $1 trillion over the next 10 years.

Part of that debate has focused on the end of the system of direct payments, with the Senate Ag Committee farm bill opting to jettison the direct payments, counter-cyclical program and Average Crop Revenue Election (ACRE) programs in favor of what Ag Risk Coverage (ARC), a program aimed at covering "shallow losses" of 11% to 21% of revenue.

But debating and tweaking details of the bill, or perhaps making substantial changes are just the legislative side of the equation. Once the bill is signed into law, another series of debates and actions starts via the implementation process involving USDA.

Typically, from the time a president signs a farm bill, it will take six to eight months before payments linked to programs in the bill will start flowing to producers.

If there are new and/or complex programs, contacts have noted it will take longer to implement those than ones that make minimal changes to existing programs.

FSA is one of the key agencies involved in this process, and contacts there note farm bills are typically written with procedural exemptions that allow for expedited clearance (no proposed stage, straight to final rule).

But that is not the only step; there is also the process of rewriting or amending dozens of program handbooks, each of which is 100 to 200 pages. In addition, contacts noted the extent of handbook rewriting depends on legislative changes. In some cases, existing handbooks can simply be amended if the changes are not too complex.

And of course, the Office of Management and Budget (OMB) plays a key role in the process as regulations must flow through that office for review and approval, a process that at times can take days or weeks to getting details finalized.

Here's a look at the regulatory process and the timeline involved typically in bringing a farm bill from the President's desk to the finished product:

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As for putting together a new program, ACRE was started in the 2008 Farm Bill, which was signed into law June 18, 2008. The final rule for ACRE was published Dec. 29, 2008, in the Federal Register but was effective Dec. 23, 2008. That means it took 185 days from signing of 2008 Farm Bill (June 18) to the final rule being published for ACRE.

USDA contacts signal that if the ARC approach is part of the final bill, they will still have time to implement the plan. Expectations are that there would be a sign-up in the summer of 2013 for ARC and that the first payments would likely be ready to be made in December 2013.

There are several issues even with ARC that will have to be addressed, including the county and farm revenue options. For those producers participating in ACRE, that information should be relatively easy to generate relative to the farm option. But since only a small portion of farmers enrolled in ACRE, that means the info will still have to be generated for others.

But the bottom line is that even once a farm bill is signed into law, there will still be weeks to months before the programs rolled out in Washington will roll out into farm country.

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