Farm bill, a year overdue, still rolling on slow track

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The new U.S. farm bill, already a year behind schedule, is on the congressional equivalent of a slow freight train - rolling from acrimony to limbo with a layover in stalemate. And Washington's disputes over the federal budget and national debt could mean further delays.

A stopgap extension of current law runs out on Monday. Negotiators from the House of Representatives and the Senate may take up the bill in the next week or two.

Traditionally, this group reconciles disagreements and brings a compromise bill to a final vote. But analysts say the standoffs on the budget and debt limit are likely to delay consideration of the farm bill, as well as make the bill a target for cuts when budget savings are needed.

Given the deep divisions between the Republican-controlled House and the Senate, where Democrats are in the majority, negotiators may arrive at the table with irreconcilable ideas of what to put into a final version of the bill.

In the end, Congress could fast-track an alternative - such as an extension of the current law for a second straight year - if the farm bill goes off the rails or never builds enough steam to move ahead.

"The road to the 2013 farm bill is not without a few major stumbling blocks along the way and potentially catastrophic caverns into which the bill could fall," said agricultural economist Vince Smith of Montana State University, author of many articles on the farm bill.

Smith said a two-year extension of current law is the most likely outcome. Others say anything from legislative success to a complete stymie is possible. "It's a pretty stalemated situation," said Otto Doering, professor of agricultural economics at Purdue University.

The overarching issue: food stamps for the poor, accounting for three-fourths of outlays forecast for $500 billion over five years. The Senate voted to pare food stamp spending by $4.5 billion over a decade through closure of a loophole on utility costs.

But the House, in a party-line vote, called for food stamp cuts of $40 billion through tighter eligibility rules that end benefits for 10 percent of recipients in 2014. The rules would shorten the number of weeks that some people could get food stamps and eliminate a 1996 welfare-reform provision that allows benefits to people with slightly higher income or assets.

Overall, the Senate bill would spend $23 billion less over a decade than the current law would were it to stay in place. The House would cut $55 billion.

Less daunting are disputes over farm subsidies in a bill that would expand the taxpayer-subsidized crop insurance program by 10 percent. The Senate would require wealthy farmers to pay more for coverage and require all farmers to employ soil and water conservation measures to qualify for subsidized premiums. The government pays 61 cents of the dollar on premiums.

Senators say the House would set grain and soybean support prices too high and unwisely base payments on planted acres rather than a farm's historical plantings of subsidized crops. And the Senate wants a lower cap on total payments to individual farmers.

Negotiators could resolve the farm program issues fairly quickly, say analysts, while food stamps may prove intractable.

ROOM FOR COMPROMISE?

House Majority Leader Eric Cantor drove the sweeping cuts to food stamps, also favored by a Tea Party-influenced bloc of Republicans. Democratic leaders in the Senate have rejected the Republican cuts out of hand. All House Democrats voted against the $40 billion package and were nearly as united in June in voting against a $20 billion cut.

And the White House has threatened twice to veto large cuts in food stamps, the major U.S. anti-hunger program. Instead, it wants Congress to find savings in farm subsidies and crop insurance spending.

A couple of Republican senators suggested this week that $20 billion in food stamp cuts would be palatable, hinting at a possible compromise. Representative Tim Huelskamp of Kansas was upbeat on Thursday, saying, "The farm bill is closer to being completed than it has been in a long time."

House-Senate conferences, as the negotiations are known, are typically the province of a select band of senior lawmakers, with congressional leaders keeping a close watch. For example, when three lawmakers wrote the compromise 2002 farm bill, they met in Senate Majority Leader Tom Daschle's conference room.

Oklahoma Republican Frank Lucas, chairman of the House Agriculture Committee, would be chairman of the farm bill conference under congressional protocol. Lucas backs food stamp cuts, expansion of crop insurance and higher crop support prices.

But House leaders have avoided negotiations for months and may want to write the bill themselves. Under that approach, they would hand a version to conferees for rubber-stamp approval. "My guess is they are not going to conference," said Ferd Hoefner, policy director of the small-farm group National Sustainable Agriculture Coalition.

The 2008 farm law expired a year ago and was extended in December through September 30.

Crop insurance and crop subsidies, as well as food stamps, will continue to operate when the 2008 law expires for the second time. Crop insurance and food stamps are permanently authorized. Crop subsidies run through the end of the marketing year for 2013 crops, which is well into 2014.

"I don't think the farm economy will even know that it's gone on October 1," said Bob Young, chief economist with the American Farm Bureau Federation.

Patrick Westhoff, director of the think tank Food and Agricultural Policy Research Institute, said January 1, 2014, would be a natural deadline for action. That's when dairy prices could double under a 1949 "permanent" farm law that would kick in.

The policy crunch would come when 2014 crops are ready for harvest if the "dairy cliff" - the jump in milk prices - doesn't force action.

(Editing by Ros Krasny and Douglas Royalty)

 


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