The United States Congress worked overtime over the New Year's Holiday to pass the American Taxpayer Relief Act of 2012 and was signed into law by President Obama. There are many provisions which are allowing members of the agricultural community to breathe a sigh of relief as they head into 2013 and some provisions, such as the farm bill, will cause much debate in the upcoming months. This article provides a summary of some of the provisions passed with this legislation, as well as a few provisions that were not addressed, which will impact agriculture.
Farm Bill Extended and No Cows went over the Cliff, Yet
The Taxpayer Relief Act includes a nine-month partial farm bill extension. With consumers up in arms over milk prices rising to $7 to $8 per gallon because the milk subsidy program would revert back to an antiquated parity-based price support formula that was implemented in 1949 and would have increased milk prices to close to $40 per hundredweight, more than double the current milk price. This extension of the current subsidy program through December 31, 2013 will keep milk prices stable. Basically, Congress kicked the can down the road on the Farm Bill and making any corrections to the milk pricing system.
This extension also extends $5 billion worth of government subsidies for commodities such as corn and soybeans. Other programs including conservation, organic growing, fruit and vegetable, and beginning farmer and rancher programs were also extended but at lower funded levels. It should be noted that the direct payments were targeted for elimination during the farm bill discussions this past year. The Senate passed a farm bill extension in June but the House never voted on its own version, leading to a stalemate which ended with the partial extension. Congress will now have until October 1 when the new fiscal year begins to pass a more typical five-year extension. Many expect the key components of last year's farm bill proposals - an end to direct payments, new crop insurance programs and cuts in nutrition initiatives - to be included in the new legislation. At any rate, it will make for an interesting farm bill negotiation in 2013.
The bill also extends supplemental disaster assistance programs by amending the federal crop insurance act to include 2013. This raises questions for which answers are not known at this time. The first is the option for farmers wanting to exit from the average crop revenue protection program (ACRE). Since the original rule was farm signed into ACRE must stay enrolled in ACRE, does this extension force farmers to stay enrolled through 2013? Also the supplemental revenue assistance payments (SURE) status is unclear at this time for 2012 and 2013.