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Farm bill detour?
Some members of the U.S. Senate are looking for other ways to speed passage of a farm bill in addition to attempts to attach it to any legislation that might address the fiscal cliff, the year-end expiration of lower tax rates and cuts in federal spending that some economists predict would send the U.S. into another recession.
In a closed door meeting of the Senate Agriculture Committee Thursday, members briefly discussed trying to attach a completed farm bill to any legislation that might be passed in the lame duck session of Congress to provide assistance to a $60.4 billion disaster aid plan for dealing with damage from Hurricane Sandy.
"It was at least brought up as a possibility. It was discussed," says a person familiar with the meeting.
Roger Johnson, president of National Farmers Union, told Agriculture.com Friday that the same possibility was mentioned to one a member of his staff by a U.S. senator Thursday evening.
"We have been so focused on the fiscal cliff. It would be nice to have two options," Johnson said. "We are happy to attach the farm bill to anything that's going to pass."
With Washington nearly mesmerized by the fiscal cliff negotiations between President Barack Obama and House Speaker John Boehner (R-OH), legislation in Congress is stalled and there's no certainty that the disaster aid package will be passed this year, either.
NFU on Thursday called on President Obama to include the potential savings a farm bill would offer, between $23 billion in the Senate version and $35 billion in the House Ag Committee bill, in any fiscal cliff agreement.
“The last farm bill has already expired, and severe impacts will be felt by farmers, consumers and agribusinesses in early 2013 if a new farm bill is not passed. The costs of a short-term extension of a farm bill will be high, and the legislative effort required to pass an extension is just as great as the work needed to pass a five-year farm bill,” Johnson said in the letter.
Johnson told Agriculture.com that on Thursday he talked to Representative Collin Peterson (D-MN), the ranking Democrat on the House Ag Committee as well as Agriculture Secretary Tom Vilsack and members of the Senate Agriculture Committee staff. The House and Senate committee's leaders still are far apart on reconciling differences in the commodity title of Senate and House versions.
"The Senate feels like they passed a bill across the floor and that gives them the moral high ground," Johnson said, adding that he agrees with Peterson that "they should have started talking three months ago."
The House has a new target price program that has higher support prices than farm law that expired in October. The Senate's bill eliminated the 2008 farm law's Counter-cyclical program, replacing it with a revenue program and USDA-backed supplemental crop insurance it its bill.
According to Johnson and another source close to the committee, the Senate Ag Committee has offered to restore the 2008 law's counter-cyclical program. It would keep the corn target price at the level of the 2008 law, $2.63 a bushel, and not raise the soybean target from the existing level of $6 a bushel. Senate negotiators offered to raise the wheat target price from the $4.17 a bushel in the expired farm bill to $4.86/bushel. They offered to raise the rice target price from $10.50/cwt. to $13.10/cwt. And they would raise support for peanuts from $495/ton to $515/ton.
Those offers are still well below the target prices in the House bill: $5.50/bu. for wheat, $3.70 a bushel for corn, $8.40 a bushel for soybeans, $14/cwt for rice, and $535/ton for peanuts. The 2008 Counter-cyclical program also makes payments on base acres, not planted acres.
Johnson says the negotiators seem to be at a temporary stalemate.
"I wouldn't say the negotiations are broken down," he said. "I would just say we're at that spot in the negotiations where both sides say 'You can sit and chew on it for a while. Here's my offer.'"
Johnson said there's risk if the two can't come together on a farm bill. That might mean that Obama and Boehner, in looking for ways to trim federal spending, would direct the agriculture committees in Congress to come up with more savings in the commodity title than approximately $15 billion in savings in the Senate bill. Obama has already proposed commodity title spending cuts of about $30 billion in a previous budget sent to Congress. And House Budget Committee Chairman Paul Ryan (R-WI) has proposed a similar level of cuts in commodity spending.
Agriculture would fare better, he believes, if a completed bill can be submitted as part of any fiscal cliff legislation.
"If we can get everyone to agree on how and where the cuts should be made, I think that strengthens our hand on the level and locations of those cuts," Johnson said.
He remains optimistic that an agreement will be reached.
"I've always felt that we were going to get a farm bill by the end of the year because the consequences of not having one are too great and too extensive," Johnson said.
Among the possibilities are $6 a gallon milk if the USDA has to enforce antiquated dairy price supports in the permanent law that every five-year farm bill replaces. Other programs in jeopardy support beginning farmers, export promotion for commodities, conservation and energy development.