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Farm Bill drama ahead

DANIEL LOOKER Updated: 05/02/2013 @ 10:55am Business Editor

This year, the farm bill debate has been behind the scenes, as members of congressional agriculture committees wrestle with food stamp spending and regional differences over commodity programs. Farm groups expect the Senate Agriculture Committee to meet next week to finalize a new bill that will be similar to last year's except for the commodity title. Leaders of the House Agriculture Committee expect to mark up their bill on May 15.

One holdup is that the Congressional Budget Office (CBO), which projects the estimated costs of farm bill programs over 10 years, hasn't quite finished its latest score, Mary Kay Thatcher of the American Farm Bureau Federation told Agriculture.com Wednesday.

"Both sides are waiting for scores as of this morning," said Thatcher, who is the group's senior director of congressional relations.

The details may remain fuzzy, but there is no doubt that Congress will have to cut more from USDA programs this year. The farm bill passed last year by the Senate had a projected savings of $23 billion. That shrank to $13 billion when the CBO released a score of farm bill spending last March, due in part to higher crop prices.

The Senate ag committee aims for the same $23 billion in reduced federal spending over a decade this time around, so that means it has to come up with about $10 billion in added cuts.

One Senate staffer told Agriculture.com that he believes the committee will give more teeth to about $4 billion in cuts to nutrition spending in the farm bill, leaving another $6 billion in additional cutbacks. "It's most likely to come out of the commodity title," he said.

And the commodity title is getting crowded. As it did last year, the Senate will eliminate direct payments. A public CBO score of last year's farm bill savings released in March shows that cutting direct payments will eliminate $44.5 billion in spending over a decade, more than enough to meet the Senate target of cutting $23 billion. But last year the Senate used some of that money for a new shallow-loss revenue program, called Agriculture Risk Coverage (ARC) and another shallow-loss program to be delivered by crop insurers, the Supplemental Coverage Option (SCO).

Both programs will likely be in the draft of a new bill that the Senate may consider next week. ARC will be smaller, partly because CBO says it would cost $3.8 billon more over 10 years due to higher crop prices, and because the Senate ag committee is likely to include a target price program. It eliminated the old target price program, the counter-cyclical program, in last year's farm bill. This year, the new ranking minority member of the committee, Senator Thad Cochran (R-MS) is fighting for inclusion of a target price program that benefits rice and peanut farmers more than the ARC program would.

"The reality is that savings have to be found, and some of that has to come from ARC," said Sam Willett, senior director of public policy for the National Corn Growers Association in Washington.

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