The House and Senate conference committee that will work on the farm bill will convene on Wednesday. Both sides are making optimistic statements about the possibility of a compromise plan, but many observers are skeptical.

The budget proposal in the House is substantially different from the farm bill passed by the House. The budget bill calls for cuts in farm bill spending of $184 billion over 10 years, about triple the cuts in the House farm bill and eight times larger than those passed in the Senate.

The huge gap between the House and Senate on reforms to the food stamp (SNAP) program may be impossible to bridge. What then?

With high risk of conference committee gridlock, it is becoming more likely that the committee charged with developing a comprehensive budget for the government by mid-December will take over work on the farm bill to claim the “saving” and ease some of the sequester cuts that are scheduled to take affect at the beginning of the year.

If that happens, the farm policy provisions that emerge may be significantly different from those proposed in either the House or the Senate’s farm bills.

The first meeting of this budget committee will be Oct. 30.

Regardless of what happens with the farm bill, food stamp spending will be cut beginning in November. Food stamp benefits were raised in 2009 as part of the government stimulus program and that funding comes to an end this month.

The reduction is about 5.5 percent for a household of four currently receiving the maximum benefit of $632 per month. This reduction will result in government spending on the SNAP program of about $5 billion for fiscal 2014. That is a bigger one-year reduction than the $4 billion per year cut proposed by the House in the nutrition bill that was recently passed.

The pressure on Congress to pass a new farm bill has been ratcheted up by that recent fierce blizzard in South Dakota and surrounding states that killed off thousands of head of cattle. Many ranchers lost much of this year’s calf crop and even a lot of pregnant cows that would provide income next year.

The Livestock Indemnity Program (LIP) expired at the end of fiscal 2011, but both the House and Senate proposals reinstate the program with retroactive coverage for 2012 and 2013.Some livestock producers are still hoping for some relief from losses associated with last year’s drought or the wildfires in Montana. But even if the LIP is approved – it will be several months before any disaster aid is paid out.

Other news from Washington:

  • USDA has started making payments to land owners with land enrolled in the Conservation Reserve Program now that the federal government is up and running again. Direct payments to 1.7 million eligible producers and payments under the 2012 Average Crop Revenue Election (ACRE) program are also being paid. Direct payments will be reduced due to the government sequester cuts that is in effect.
  • The House passed the Water Resources Reform and Development Act by an overwhelming margin. The bill provides guidance to the Army Corps of Engineers on projects to improve the country’s waterways. This bill sets harder dealings on costs and timing projects, which can now take up to 15 years of planning and studies before any actual physical work on the project begins. The House bill authorizes 23 new projects costing about $8 billion of federal funds and additional $5 billion of state or local matching funds. The Senate passed its version of the bill in May – so the next step is a House-Senate conference committee.
  • Canada and the EU have signed a new free trade agreement that will give Canadian cattle and hog producers greater access to more than 500 million EU customers. The agreement still must be approved by the EU Parliament and by Canada’s provincial governments. This agreement puts pressure on U.S. negotiators to make progress on the U.S.-EU discussions on the Transatlantic Trade and Investment Partnership (TTIP).