Seminole Crop E News

Agricultural News for Farmers and Agribusiness in SW Georgia

Farm Bill?

Posted by romeethredge on November 16, 2013

I took this photo of part of the Union Station in Washington DC in 2009, while on a Georgia Agri-Leaders trip… It opened in 1907. Look at what it says about agriculture.

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Dr. Nathan Smith, UGA Extension Ag Economist, has this update on the farm bill.

 As far as current progress on the farm bill,  it depends on who you talk to.  Nobody can say with any confidence a farm bill will be passed before December recess, targeted as December 13 for the House.

The farm bill is in conference committee and the first public meeting for the 2013 Farm Bill conference committee was October 30.  The full committee has not met since then but the chief negotiators being the chairs and ranking members have met.  The goal is to have a conferenced bill by Thanksgiving.  The main hurdles that have kept a farm bill from being passed a year ago are the Nutrition title and the Commodities title.    The House passed a separate Nutrition bill with $39 billion in cuts over 10 years while the Senate version of the farm bill has $3.9 billion in nutrition title cuts.  That’s a big difference and getting a compromise that will pass both houses of congress is a huge hurdle.

There are two different dairy programs proposed in the Senate and the House dairy subtitles.  The Senate version has a new dairy stabilization program based on insurance and supply control to try to stabilize prices.  The House version is actually an amendment submitted by Reps. Bob Goodlatte (R-Va.) and David Scott (D-Ga.) that removes the production limits from the bill.  It was supported by Boehner, the House Chairman. So, that is a major negotiation going on.

Also in the Commodities Title, the corn and soybean associations are really pushing the revenue-based shallow loss programs of Agriculture Risk Coverage (ARC) in the Senate bill and Revenue Loss Coverage (RLC) in the House.   The summary gives a little detail about the two proposed programs.  Southern growers have not supported these revenue-based programs and prefer a program similar to the current Counter-cyclical Payments (CCP) program.   The 2013 Senate bill has an Adverse Market Payments (AMP) program thanks to Thad Cochran of Mississippi taking over the ranking member of the Senate Ag committee,  and the House has a Price Loss Coverage (PLC) program.    Basically, the Senate and House have similar programs but the corn and soybean growers favor the revenue-based program.

  The revenue-based programs are designed to work best with revenue insurance and that is an issue in the South for commodities that are heavily irrigated like peanuts and rice where revenue insurance is not as popular or even available in the case of peanuts.

Those are the main issues to be negotiated in order to get a farm bill passed.   I think there is a better chance of one passing because another extension is not desirable.  If an extension were to be passed it is quite possible direct payments would be cut deeply or out altogether.   The Congressional Budget Office (CBO) would come out with a new baseline in Spring which could have a lower baseline that is currently being used.   The CBO scores the projected of the cost of farm bill programs.  The CBO baseline is an estimate (projection) at a particular point in time of what federal spending on mandatory programs likely would be under current law.  Congress is working under a procedural rule that  they can’t increase mandatory spending without offsetting it somewhere else or generating new revenue with a tax increase.  Also, cutting direct payments in the extension would result in a lower baseline for 2014 negotiations.   But who knows what will happen.   Whatever the final version looks like, it is going to be a big education effort as the new programs will be crop insurance based.

The short of it is the conference is now finally meeting and in order to get a farm bill passed, compromises need to be found in the Nutrition and Commodities titles for dairy and the revenue and price based commodity  programs.  An extension is viewed as not desirable but may happen.  Also, the House version would make the 2013 Farm Bill permanent legislation meaning if a new one is not passed in the future then the 2013 would remain in affect instead of going back to 1938 and 1949 legislation.

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