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Farm bill funding squeeze

DANIEL LOOKER 12/15/2010 @ 3:06pm Business Editor

By now,  it’s common wisdom that a tight federal budget is likely to make writing the next farm  bill harder than usual.

At the Iowa Soybean Association’s annual policy meeting Tuesday,  an experienced Washington lobbyist, Stephen Frerichs of AgVantage, LLC,  laid out more details on just how hard it will be.

“The next farm bill isn’t going to be any fun at all,” said Frerichs, who has lobbied for the crop insurance industry for many years and now includes the Iowa Soybean Association among his clients.

Even before the Congressional Ag Committees have to start trimming programs, they will start with about a $16 billion shortfall, he said,

That’s because 37 programs in the current farm bill will expire before the next one takes effect, Frerichs said. They include the new permanent disaster program called  SURE (Supplemental Revenue Assistance Payments), the Wetlands Reserve and Grasslands Reserve and energy programs, Frerichs said. SURE, the largest of those temporary programs, will likely be out of funds in 2011, he said.

Altogether, the cost of keeping those programs going for another five years in the next farm bill would be $9.8 billion above the cost of the current law, estimated to cost about $300 billion at the time it was passed in 2008.

The other $6 billion comes from cuts to crop insurance, about half of that made when the farm bill was passed and another $600 million per year negotiated by the USDA this year for its new standard reinsurance agreement with the industry.

“The main lesson from the 2008 Farm Bill was that commodity programs and crop insurance were cut to pay for other spending,” Frerichs said. “I expect that to be the case in the next farm bill as well.”

When the 2008 Farm Bill was passed, the Congressional Budget Office estimated that roughly two-thirds of the money in the Farm Bill would go to nutrition programs. But, as the recession worsened and employment lagged in a weak recovery, the share of spending on food assistance has gone up.

According to the House Ag Committee’s 10-year projection last March for costs for the USDA and other programs under the Farm Bill, three-fourths of farm bill spending now goes to nutrition, with nearly all of that being food stamps.

Under that 10-year projection, the second biggest farm program budget outlay is crop insurance, at 9% (before the USDA trimmed another $6 billion over 10 years in the reinsurance agreement)

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Farm Bill 12/25/2010 @ 5:56pm It seems to me that this bill should be called the "Food Stamp" bill. The typical voter probably has no idea that 3/4s of the farm bill is comprised of food stamps for welfare. It has the potential of giving farmers a bad name when voters think we are getting far more government subsidies than we really are. I guess congress has to disguise spending that might otherwise be unpopular with voters.

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