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Farm Bill Update

Mike McGinnis and Dan Looker discuss the Senate passage of the Farm Bill, and what it could mean for farmers.

Mon, 25 Jun 2012|

-Thanks for stopping by. Mike McGinnis for agriculture.com with Successful-Farming's Business Editor, Dan Looker and our local resident expert on the Farm Bill. Recently, the US Senate passed their version of the new Farm Bill. We're gonna talk to Dan to ask him to jump inside the number, so to speak, with this-- what's considered a 5-year $500 billion Farm Bill. But Dan, there are some cuts in this age of cutting-- in this era of cutting. There are some cuts that some farmers might want to know about. Give us your take on where they cut and what programs survived the Senate finding. -Well, the biggest cut I don't think will come as a surprise to anyone-- and that's the end of the direct payment program and that was costing about $5 billion a year, so that much money will be saved over the next 10 years. We heard a lot of different numbers, some people refer to the Farm Bill was almost a trillion dollar bill and that's the cost that we projected out over 10 years but, of course, over the 5-year life of the Farm Bill if it finally passes the full congress that would be just over about, you know, half a trillion will be the cost. -Okay. So that is one of the features probably of the new version of the Senate Farm Bill. Also, crop insurance takes center stage now, correct? -Yeah. As people who worked for various farm groups have been saying for probably 2 years, you know, please don't touch crop insurance. And for the most part, the Senate didn't do that. They did pass a couple of amendments that were not in the original bill during the debate and one wouldn't tie conservation compliance to crop insurance so you have to be meeting the conservation compliance rules that applied to other farm programs and use to be direct payments for example. And, some lobbyist for conservation groups have contended if that only affects about 2 percent of all farmers that most people are already in compliance. But there will be a lot of paperwork, a lot of uncertainty. The industry isn't too happy about-- the crop insurance industry. So that passed by a very narrow vote. I'm thinking it was just a little over 50 votes. Some amendments required 60 and some just required a simple majority and that one did pass. It may not survived by the time the House raised their own bill-- -Right. -And they put the two together. But, right now the Senate Bill requires conservation compliance. -And as for keeping score at home, the Senate attached 73 amendments to this Bill. -Right. -And so-- now, of course, will go to the House. We'll talk about-- we'll prognosticate with Dan here in a minute about what-- how this might play out of the House. But let's stay with this senate version of the Farm Bill. You had mentioned before we started here that even though we're hearing a lot about some of the cuts. There are some people that feel like-- really what the Senate did was just moved some money around. -Right. I think most people in the agricultural community are pretty happy with the bill-- maybe with the exception of the changes to crop insurance. But, other groups-- food activist, environmental groups. The environmental working group would be one example, would argue that this is-- it's called reform but it really-- it's kind of a reform light. It doesn't do all that much and-- one thing that they'll point out is that, we're cutting direct payment saving $5 billion a year but were creating a new program, Agricultural Risk Coverage, which is a little bit like the Old Acre Program but simpler-- it would pay you sooner, and that's what so called Shallow Loss Program that-- or cover some of the losses that aren't covered by your crop insurance you buy, and that will cost another $3 billion a year roughly according to the Congressional Budget Office. -Now, this Senate version of the Farm Bill is considered a victory, so to speak, amongst the Senators because they really believed this is a bi-partisan bill. -Oh, absolutely. It passed out of the committee with only 5 votes against and those were from Senators from the South for the most part and as well as Sen. Gillibrand from New York who didn't want a cut food stamp programs at all. The Senate Bill does trim food stamp spending or nutritional spending just a little bit with some reforms so, they're saving about $4 billion over 10 years. That's not a huge amount when you consider that we're spending almost $80 billion a year right now on food stamps. But-- in any rate, if the Bill pass with strong support out of the Ag Committee, then in early June with the Senate had a procedural vote to move forward on the debate, it got 90 votes in favor and only 8 against, so that was very strong support. When the final bill passed, I think it was about 64 right-- that was due to the fact that we had some Southern opposition. -Okay. Who was the key Senator in this passage of this bill? I know you've mentioned that Senator Stabenow had did a lot of work. -Yes, I think she was very, very skillful in a lot of different ways. She's a tough negotiator but she also was very good at handling the strong egos and other 6 former Chairs of the Ag Committee on her own committee. -Well, there are any of those, right? Egoism -Well, there probably 100 strong egos in the Senate. But, Chairwoman Stabenow was very effective in working with her own committee. The other thing she did is that, she treated the ranking Republican Senator Pat Roberts from Kansas almost like a co-chair. You know, there's always good cooperation between the leaders from both parties on the Ag Committees. Generally, they're not very partisan, but she probably gave Senator Roberts even more influence. It was almost as if he had Veto power over everything as well. And then when it came down to try to give this bill through the Senate, both Senators; Roberts and Stabenow-- I'm told, were working very hard behind the scenes to get the thing passed and-- when it was all over, it was a rare Kumbaya moment on the floor of the Senate when the Democratic leader Harry Reid described both Stabenow and Roberts as these two fine Senators and then the minority Mitch McConnell talked about how pleased he was that his good friend, Senator Harry Reid allowed for fairly full debate and allowed for the amendments from both parties to be debated-- -Okay. -And even some that were considered not your main that were directly relevant to the Farm Bill. So, it was almost like an early 4th of July in Congress. -Good. Finally, now-- this is the Senate version of this farm that we've been talking about that goes down to the House. Can you tell us what's it look like as far as this version or another version of the Farm Bill being passed yet this year? -I wish I could tell you for sure. I don't know that anybody really knows for sure what's going to happen but the odds appeared to be a lot better now that the Senate has passed this bill with pretty strong bi-partisan support. And we know that Chairman Frank Lucas from Oklahoma may have a House Ag Committee-- has been working very hard to get this bill done. They've allow the Senate to kind of take the lead and then their plan all along was to come in right after that and move as quickly as they could. -Uh-hmm. -So, on the 11th of July, the House Agriculture Committee will be marking up their own version of a Farm Bill that will have more support for rice and peanuts and some of the crops that are growing in the South. I don't know the exact form of that yet, but it's likely to be something like counter-cyclical program payments with target prices and that could be expensive. So, the big issue is how do you measure that with those new Shallow Loss Program that cost $3 billion a year. But, I know that you will try to accommodate the Southern interest more than the Senate did, and I know that if they'll be working very, very hard to get this bill on to the floor of the House for about-- beyond that, you know-- -It's hard to count. -I think it's risky to predict. But I think the odds of having a Farm Bill this year just went up a lot and anybody who has view in this web cast can influence that whole process by writing your Congressman or Congresswoman and urging the House to bring this bill to evolve. -Okay. Thanks Dan for your time. -I'm glad to do it. -I appreciate it. Dan Looker, Successful-Farming's business editor in our local resident expert on the Farm Bill. I'm Mike McGinnis for agriculture.com.