Content ID


Thinking the unthinkable: Agriculture under a 1949 farm bill

Remember these prices: $4.12 1/2 per bushel for corn; $8.32 per bushel for wheat.

Under economic conditions of late 2007, those would be the new loan rates if Congress and the Bush administration can't agree on a farm bill, Congress doesn't extend the 2002 bill, and farm programs revert to permanent laws passed in 1938 and 1949.

Thursday, the National Farmers Union became the second farm group to say they'd accept that alternative if there isn't a new farm bill. Earlier this week, House Agriculture Committee Chairman Collin Peterson (D-MN) raised that possibility as talks between Peterson and acting Secretary of Agriculture Chuck Conner remained deadlocked.

The Bush administration is still threatening a veto of any farm bill Congress produces if it contains what it describes as tax increases used to pay for new programs in the bill. The American Agriculture Movement has already endorsed the idea of just letting the 2002 farm bill expire after March 15, the date that Congress extended current programs to in an appropriations bill late last year.

Farmers Union President Tom Buis told reporters Thursday that his organization's board voted the day before to endorse letting the 2002 law expire if Congress can’t pass a bill that President Bush will sign, or if it can't override a potential veto.

"I think Chairman Peterson is right on target," Buis said. The permanent farm law, long considered an expensive anachronism that wouldn't fit in today's agricultural economy, might not be as costly today.

Under the old law, farmers could forfeit corn placed under a nine-month load to the USDA at a price of 50% of parity. That's about $4.12 1/2 a bushel according to a recent Congressional Research Service estimate. In essence, that's the government support price, which might not be triggered in today's market, Buis said. Wheat, at 75% of parity, would have a support price of about $8.32 a bushel, also under current prices.

Some commodities such as cotton would have higher support, at $1.36 a pound, but the old law does not have such new programs as direct payments. Not making those would save the federal government about $5 billion a year, Buis said.

Nothing would really be affected until after the harvest of 2008 crops, Buis said. And such conservation programs as the Conservation Reserve Program would continue.

There would be no soybean program, however. And no loan deficiency payments.

Buis said this alternative is probably more realistic than an extension of the 2002 farm bill. That's because the coalition that supported the 2007 farm bill would not back an extension. That approach would not have new farm bill spending increases such at $2.5 billion more for fruit and vegetable programs, as well as increases in food stamp and food aid funding.

"A simple extension is not possible. You set of a food fight over the money in it," Buis said.

Buis said that reverting to permanent law isn't the goal of Farmers Union.

"Our preference is to have the House and Senate work out their differences and send a bill to the president and hope he signs it," Buis said.

When asked support for reverting to the permanent law is a bluff to counter the White House veto threats, Buis responded, "They sort of started this thing by saying they were going to veto the farm bill."

Buis said he doesn't believe that loan programs under the permanent law would violate current World Trade Organizations agreements as long as they stayed under existing spending limits.

But, he said, trade issues, too, might put pressure on Washington to reach a farm bill agreement.

"I think if permanent law would kick in, you'd even have the free traders hammering on the administration to get it done," he said.

When asked about the chances that Congress would override a veto of its farm bill by Bush, he said, "It's growing daily."

Remember these prices: $4.12 1/2 per bushel for corn; $8.32 per bushel for wheat.

Read more about

Talk in Marketing