Farm bill discussed at conventions
House and Senate ag committee leaders agreed on $23 billion in cuts in farm bill spending before Thanksgiving, but with the supercommittee implosion it doesn’t much matter.
The supercommittee of 12 was supposed to decide upon $1.2 trillion in budget savings by Nov. 23, be it through cuts or taxes. The 2012 farm bill was going to be submitted to the committee and then it would have had an up or down vote on the floor of the House and Senate. No amendments would have been allowed. The committee announced on Nov. 21 that it wasn’t able to reach agreement.
Where does that leave the farm bill?
"Presumably there will be a regular process of holding hearings and seeking input to consider the alternatives that the committee was working on, as well as additional alternatives," National Farmers Union president Roger Johnson said Nov. 21.
The $23 billion in cuts in farm bill spending were spread over 10 years, said Mary Kay Thatcher, American Farm Bureau Federation senior director of congressional relations. Thatcher spoke Nov. 19 at the Minnesota Farm Bureau Federation annual meeting in Brooklyn Park.
The proposed 2012 farm bill would have cut 25 percent ($15 billion) from commodity program spending, 10 percent ($6 billion) from conservation spending and less than 1 percent ($4 billion) from nutrition spending, Thatcher said.
Agriculture had stepped up to the plate to take three times its fair share of cuts, Thatcher said, because the agricultural economy is viewed as doing so much better than the overall economy. Its fair share worked out to $7 billion.
In her opinion, agriculture would have been cut deeper if it didn’t step up to the plate with its own solutions.
A wake-up call to agriculture came with the Senate’s 84-15 vote to end farm program payments to to those with adjusted gross income higher than $1 million. The Senate has traditionally been friendlier to agriculture because every senator represents some farmers. In the House, however, 25 percent of the 435 representatives have zero farmers in their districts. A higher percent than that care very little about farming because they have few farmers in their district, Thatcher said. Those numbers are expected to grow with redistricting next year.
The farm bill now in limbo was written behind closed doors in three months, Thatcher said. Agriculture committee leaders Rep. Frank Lucas, R-Okla., Rep. Collin Peterson, D-Minn., Sen. Debbie Stabenow, D-Mich., and Sen. Pat Roberts, R-Kansas, crafted the legislation. It’s not the way they would have chosen to write a farm bill, but she’s not sure given the time frame that it could have been done any other way.
"I think a lot of people got caught off guard," she said.
Thatcher expected the specialty crop, livestock and crop insurance programs to remain about the same. She expected Conservation Reserve Program acres to be reduced to 25 million.
The commodity title was the most difficult to write, she said. Direct payments were eliminated, there was a new shallow loss program similar to ACRE and target prices were raised.
Rice was the biggest winner in target price increases, said Roger Johnson, speaking at the Minnesota Farmers Union annual convention on Nov. 20. The target price was raised to 110 percent of the cost of production. He wondered aloud if he could plant some of his North Dakota land that was too wet to plant last spring to rice, drawing a chuckle from the audience.
Corn and soybean target prices increased to 90 percent of the cost of production and wheat 60 percent, Johnson said.
Farmers would make a one-time selection to either participate in the target price program or to participate in the shallow loss program for the life of the farm bill.
The bill written behind closed doors is likely better than what could make it through the floor of the House, Johnson said. There’s also the challenge of getting it through the agriculture committee, which is composed of 50 percent new members and most of the new members are from the Tea Party.
Johnson reminded Farmers Union members that farm bill spending is only a small slice of the federal budget, coming in at 2 percent of federal spending. The Congressional Budget Office projects total farm bill costs at $1.1 trillion from 2010-2020.
Of that 2 percent, only 14 percent is for the farm safety net, he said. Of that 14 percent, direct payments are less than half of farm safety net spending, at somewhere around 30 percent. Crop insurance spending, used to subsidize premiums farmers pay, comes in around 54 percent.
"So when folks in Congress or folks in the public, in the media, say … the solution to our federal deficit and debt problem is to cut these lavish subsidies that all of us in agriculture are getting just think about that,"
The majority of farm bill spending, 80 percent, is for nutrition programs.
"We will be the last organization in Washington, D.C., that's going to go to Washington and say take money out of food stamps or out of the SNAP program or out of school lunch programs, school breakfast programs," Johnson said. "Those are the sort of programs designed to help people who don't have much money to feed their kids."
More than half of federal spending, 63 percent, is for defense, Medicare, Medicaid and Social Security and for every $1 spent, the federal government is borrowing 40 cents.
"We all know that is not sustainable," Johnson said.