Reasons for McConnell's No Vote on Senate Ag Panel Farm Bill Shows Potential Hurdles Ahead

May 9, 2012 02:12 AM
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A long way to go and likely big changes ahead for next farm bill

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

After the nearly $1 trillion Senate Agriculture Committee farm bill measure passed with a proxy no vote by Senate Minority Leader Mitch McConnell (R-Ky.), some observers wanted to know the reasons for the GOP Senate leader's farm bill rejection.

Farming in Kentucky, like every other industry, is not immune to the dangers posed by growing debt,” McConnell said. “The farm bill has traditionally been seen as an opportunity to protect small farms, invest in rural economies, and support more diversified farming crop production. However, these are the very programs that are bearing a disproportionate fiscal burden under this bill. Instead of including initiatives that streamline the US Department of Agriculture and reform nutrition programs, this year’s bill spends a trillion dollars and achieves insignificant reforms to major programs.”

It remains to be seen how McConnell's no vote regarding the farm bill to date will affect the eventual measure, which is expected to see significant changes from what passed the Senate Ag panel. But some farm bill watchers signal McConnell's statement shows that outside the Senate Ag Committee exists a lot of hurdles ahead.

First, some summaries and analysis. The Senate Ag Committee released their version of a 17-page summary (link) of the farm bill approved by the Senate Ag panel – a bill that could look considerably different if the measure ever is allowed amendments in full Senate debate. Also, here is a link to a summary and analysis of some Senate Ag Committee farm bill provisions by Ohio State University agricultural economist Carl Zulauf.

Senate Majority Leader Harry Reid (D-Nev.) has provided no details regarding any Senate chamber debate of the farm bill. Reid typically “fills the tree” as they say regarding any controversial legislation, and the farm bill would fit the controversial tag especially if you consider equity problems it has regarding southern-based crops of rice, cotton and peanuts.

But veteran congressional contacts are still not sure if the corn-, soybean- and northern-tier-state-friendly Senate Ag bill will be voted on before Nov. 6 elections. Some observers continue to speculate that the bill, and a coming House Ag Committee measure, which is expected to be quite different than the Senate approach, will be “deemed” passed and differences worked out in what is expected to be a major post-election, lame duck session of Congress. If so, it may not even be a traditional “conference” approach. If that is the route taken, so much for transparency.

But some spend-happy lawmakers in the lame-duck session will need some budget offsets for additional spending in the post-election session, and they are already likely looking toward the $23 billion to $33 billion in budget “savings” that the Congressional Budget Office (CBO) will score for the mega farm bill. Those CBO budget saving estimates are just that, and are based on many assumptions, including price projections, some which could prove off the mark if history is any judge.

Some observers say the biggest issue coming out of the Senate Ag Committee farm bill to date is the potential budget exposure, especially for corn and soybean payments, should commodity prices take a concerted nose dive.

That some major farm and commodity groups are now arguing for Senate consideration of the panel-passed measure is no surprise. They are likely hoping for limited amendments. But this Senate has shown that when it comes to passing bills with a lot of funding (and this one has nearly a trillion dollars worth over ten years), they can find the votes.

As for the coming House Ag Committee markup of its farm bill version, that should prove quite interesting. And it will likely be far more equitable when it comes to regional and crop differences that were exposed in the Senate version to date.

The House farm bill approach will likely offer farmers an option of higher reference/target prices or a likely modified version of the Ag Risk Coverage (ARC) revenue assurance scheme included in the Senate bill. It will be interesting to see if the House approach avoids any chance of farmers garnering double-dip payments from both the ARC (shallow loss) and crop insurance programs.

Another key House issue will be the eventual fate of the Senate-pushed dairy policy change, policy changes that include voluntary supply management language if needed to temper any greater-than-expected costs relative to the bill's gross margin protection program. While sources say this may show up in the manager's mark, likely because of a major push to include it by Ranking Member Collin Peterson (D-Minn.), it will be interesting to see if any Republican member of the House Ag panel will do what their counterparts did not do in the Senate Ag Committee version – offer an alternative dairy policy approach that will be voted on.

Of note regarding dairy policy and overall farm bill spending will be the 16 new Republican members of the House Ag Committee, many of whom are supporters of the so-called tea party movement. This will be a litmus test for those new members regarding how they vote when it comes to a big spending bill and in the case of dairy, whether or not they vote for something like supply management when they profess to prefer the open market for policy issues. 

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






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