Perspective on Farm Bill: The Next Steps

July 3, 2012 05:30 AM
 
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via a special arrangement with Informa Economics, Inc.

Ag spending will be scaled back from Senate bill in both House bill, conference bill and in years ahead


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


The spending high-water mark in the farm bill debate very likely came with the Senate-passed bill, at nearly $1 trillion – nearly a billion dollars per page. A lower spending level is expected whenever the House Ag Committee holds its markup session (scheduled for July 11) and perhaps lower when then full House as a chance to amend the measure. Eventual spending will be somewhat higher than the final House bill, in consultation with Senate conferees, but in the years ahead, Congress will likely insist on more budget savings via farm and food spending.

Sept. 30, 2012 is not a real farm bill deadline. While farm-state lawmakers, including House Ag Chairman Frank Lucas (R-Okla.), want to have a farm bill completed by Sept. 30, 2012, to avoid the need for an extension of the 2008 Farm Bill, proponents say they will have several more months before “permanent legislation” would cause problems without a new farm bill in place. For example, it was not until late December 2007 before lawmakers started approving what turned out to be the need for several extension of the 2002 Farm Bill relative to the 2008 Farm Bill debate. So when lawmakers stress the need to get a farm bill done by Sept. 30, 2012, it is mainly because they want the bill passed, period – not because failure to do will involve many ramifications.

Should an extension be likely, and most observers think it will be at some point, the question then becomes how long of an extension and what will be part of that measure. If it is full one-year extension that would cover 2013 crops, then conservative lawmakers would very likely want to eliminate direct payments for that crop year, or at least a big reduction in direct payments as a “down payment” on the need for agriculture spending to be part of deficit reduction ahead.

The House Ag Committee could release details of its farm bill proposals this week – ahead of the scheduled July 11 markup. The Senate approved its five-year bill (S 3240) on June 21. That measure would eliminate several farm support programs — including direct payments — and would replace them with a controversial revenue protection program known as Agriculture Risk Coverage (ARC) that would insure for revenue losses of only 11 percent to 21 percent. The federally subsidized crop insurance program would take on even more importance than it currently does via stepped-up funding and a new program called the Supplemental Coverage Option (SCO). Cotton producers would also jump over to a crop insurance program via the STAX program included in the Senate farm bill, a program that does not have a payment cap attached to it.

Lucas and other House farm-state lawmaker hope that the House could still pass its measure by the Aug. 3 congressional recess, thereby giving key lawmakers and their staffs time to work out compromises before Nov. 6 elections. That remains to be seen.

But some observers even question the timing of the House Ag Committee farm bill markup date of July 11 because that is when House Majority Leader Eric Cantor (R-Va.) wants to have a House floor debate and vote to repeal the health care reform law. While that is expected to pass, it will not be passed in the Senate. Lucas has stated the farm bill markup date was firm and that the committee could work around the floor action.

Bottom line: The farm bill could be bumped to the post-election, lame-duck session and perhaps without even having a House floor vote. That is what occurred for the recently-passed transportation bill due to problems getting that measure cleared on the House floor. This has always been an option among congressional leaders, sources report. Another incentive, they add, is that some of the expected additional spending during the potential six-week lame-duck session could be offset by the around $28 billion in farm bill savings over ten years expected to be the final tally when House and Senate farm bill leaders have to work on differences – either in an official conference or via a lame-duck session without a formal conference.



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


 


 

 

 

 

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