Perspective: What's Next for Senate Farm Bill?

April 25, 2012 05:48 AM

The current farm bill writing fracas in the Senate is still another example of how it has become so difficult to get any type of omnibus measure going - and in this case, even at the committee level. Can you imagine the twists and turns once the measure gets to the full Senate chamber?

And then there are the feisty House members, many of whom are new to the chamber and want to convince voters back home that they came to Washington to change things, and to stop the spending bonanza.

While the Senate farm bill cuts $26.4 billion in farm bill spending over ten years, there will likely be up to $3.4 billion of those cuts used in the next few days to help soothe disgruntled senators and farm groups.

It's not what you cut, it's what you spend. And while the likely eventual $23 billion cut sounds like a lot and is, remember that is an estimate based on Congressional Budget Office assumptions on prices, participation (in the case of dairy policy), etc. And while the 2002 Farm Bill came in considerably lower than CBO projections at the time that bill was written, the reverse could be the case with whatever year is put on the new farm bill version. Reason: the budget exposure of the coming bill could be substantial if commodity prices, especially for corn and soybeans, are substantially lower than CBO projections.

Also, the Senate farm bill, with the cuts, would still spend $994 billion over ten years. Even in Washington that is still a chunk of money. And again, that is based on CBO price and other assumptions.

So what is next for the Senate Ag Committee? Sources inform that Majority Leader Harry Reid (D-Nev.) scheduled no floor votes today to allow Senate Ag Committee members to complete their markup. That will not happen due to the postponement of today's previously scheduled markup session.

A big push is on by Senate Ag Committee leaders and staff to get a markup session going on Thursday, April 26, but at the latest on Friday, and if so, that would be a marathon session. The reason is that some contacts signal if this week does not conclude the Ag Committee markup, then it will be at least 12 days before another markup session could be held (the reason for 12 days was not provided). The Senate is out next week on another break, and will return the week of May 7. A markup session could still take place the week of May 14, in time to get something completed before the Memorial Day week-long recess.

As for possible changes ahead, northern-tier senators from Montana and North Dakota are pushing hard for changes to the Ag Risk Coverage (ARC) language (return of reference prices?). Dairy processors do not like the supply management provisions in the dairy policy title in the current mark. And rice and cotton growers, groups and their senators definitely want a more equitable farm bill for those crop enterprises.

Moving from base to planted acres for ARC payments explains a big portion of the dilemma for rice, cotton and wheat, and why most corn and soybean growers and their lobby groups like the current mark. But rice, especially, needs more than tweaking.

Senate sources say it was known that the farm bill draft saved more than the goal of $23 billion because they knew some senators and groups would be lobbying for changes. That is why there is up to $3.4 billion in additional money to offset some of the negatives being cited about the committee mark. However, when it comes to farm bill spending, that $3.4 billion has probably been spent ten times over.

The current farm bill mark was written by the Chairwoman and Ranking Member as usual, distributed to staff, and then modified. A lot of people and groups were asked to provide input, I am told. Groups were offered as many meetings as they wanted to come in and discuss ideas and concerns. Some came in multiple times, others did not, sources advise. "If there are complaints about the mark, that is not the fault of any committee staff or members, it is the fault of those groups that chose not to participate in the process. Members of commodity organizations should ask their representatives how many times they sat down with staff and/or members. Some won't want to answer that question," one contact informed.

But one farm bill veteran responded, "One thing that I would add is that there is a difference between hearing and listening. One is just checking the box but doing nothing about it and the other is following up with solutions to address the concerns."

Meanwhile, sources alert that the acreage issue between ARC and the cotton STAX was a drafting error. "Cotton and numerous other groups have been told that, had it explained to them, and were told it was a drafting error and would be fixed."

Another farm bill observer had some pointed analysis of the process thus far: "My view is that this is clearly not ready for prime time. Farmers are planting and can't review and comment. Members had arbitrary deadlines put on them for filing amendments that were impossible. Mistakes no planting flex for cotton as just one example...speak to the problems with this bill, not to mention the most serious: if you sustain an 11 percent revenue loss, this thing will pay out on the next 10 percent of revenue losses...but then ALL price loss is on the farmer. Most farmers don't want little bits of money shooting out at them when they don't need it. They want that little bit of money used to leverage real price protection when they do. And, for farmers who cannot afford 80 percent crop insurance, well, they are exposed on production after that little 10 percent band too. There was an American Experience program on last night about the '29 stock market crash. One was quoted as saying it is an American habit to think the good times will always keep rolling...Blue Skies was the popular song. Well, when clouds come over crop prices and farmers ultimately have a choice between protection when they need it and slot machines when they don't, those who choose slot machines should be required to sign a waiver that they will not come back to Washington for help. That's where this farm bill FAILS farmers, no matter what they grow or where they are from."

Bottom line: This is no different than other farm bills. It is just more widely covered, with some writers not having the history of the give-and-take that is always part of the process. But writing an omnibus measure under a budget-cutting atmosphere, and with critical elections ahead, has added more pressure to the process. Just ask the Senate.

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