Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., plans to begin serious work on the new Farm Bill when Congress reconvenes on April 16. The hope is to get a bill to the Senate floor for debate before Congress breaks for Memorial Day. However, even if all of that goes smoothly, huge challenges will remain.

The Senate bill will probably be developed with the premise that spending will be reduced by about $23 billion over 10 years. Any bill developed in the House will have much bigger cuts, with the biggest cuts coming in the early years of the program. Assuming that the House gets its own bill passed before the end of September (which is far from a sure thing) the differences between the House and Senate bills will be hard to resolve. An extension of the current Farm Bill is increasingly likely. But it is not clear what changes will have to be made to accommodate deficit-reduction efforts.

The House budget passed last week calls for $180 billion in cuts to USDA spending over 10 years. The reduction in actual agriculture program spending would be about $33 billion, with most of the rest of the money coming from food and nutrition - including more than $133 billion from the food stamp program alone. The House Agriculture Committee would be charged with reducing spending by $8 billion in fiscal 2013 and $20 billion worth of cuts would come in the next five years.

The House Agriculture Committee must report how it will make the cuts to the Budget Committee by April 27. The House-passed budget will probably not be approved in the Senate, but will nonetheless affect most appropriations bills voted on in the House.

The 2008 Farm Bill will probably be extended for a year according to House Agriculture Committee Chairman Frank Lucas (R-OK). He says “We’re kind of late in the game right now to have a new Farm Bill in place for the fall planting season” Lucas said in a recent radio interview. Both the 2002 and the 2008 Farm Bills were passed after one-year extensions of the previous bills. However, even with an extension, some changes to the current bill would be needed to meet cost-cutting efforts.

EPA has approved the applications of 20 companies to produce E-15. But it’s just another step in the long process of making E-15 available to consumers. EPA still needs to approve steps to prevent misfueling at the pump and develop a monitoring program to insure the fuel is sold properly. Further, very few of the more than 100,000 gasoline stations have pumps that can dispense mid-level or high-blend ethanol fuels. Still, officials from the Renewable Fuels Association say E-15 could be available in the heartland as early as this summer.

Agriculture Secretary Vilsack told the Senate Agriculture Appropriations Subcommittee that budget constraints are forcing the Administration to proceed with plans to close nearly 260 USDA offices, facilities and labs across the country. Vilsack says USDA has reduced its staff by nearly 7,800 over the last 15 months. Congress has blocked previous efforts by USDA to close offices, but this time some office closings are likely because of the efforts to reduce federal deficits.

Bills to permanently eliminate the federal estate tax have been introduced in both the House and the Senate. Currently, the estate tax is set at 35 percent with a $5 million exemption. However, the tax goes to 55 percent with a $1 million exemption if Congress does not act before the end of the year. With the recent increases in land values, the estate tax that would be in effect in 2013 could have huge implications for farmers and ranchers. Most people in agriculture would love to see an end to the estate tax. But with efforts to reduce federal deficits, Congress will probably not approve the bills that would totally eliminate this source of revenue.