farm bill debate continues in washington

Despite Incentive To Act Quickly, Farm Bill Progress Unlikely

Discussions between lawmakers to reconcile the House and Senate versions of the farm bill are now underway after being sidelined by all the budget hoopla of early October. If you believe the politicians, there’s a good chance of a compromise plan emerging from these talks. However, the lobbyists and special interest groups with a stake in the farm bill don’t share that optimism. The differences between the sides are just too large to find a compromise at this point, they say. 

One needs a scorecard to keep track of all the differences. Of course, everything in Washington is budget-driven at this point, and that’s understandable. After all, our government reportedly is spending $200 million/hour more than it takes in, and that’s 24 hours/day, 365 days/year. The situation is even more problematic when one considers that those figures don’t count all the off-book debt we continue to rack up, which makes the $200 million/hour look like pocket change.

The budget that’s been proposed by the Senate is dramatically different from the farm bill passed by the House. This is where it gets confusing. The proposed House budget has no chance of passing the Senate or getting Obama’s signature. However, since the House has the only “real” proposal on the table, it’s the only standard to go by.

The House passed a farm bill that contained only a third of the cuts that the House budget had wanted, which was $184 billion over 10 years. Meanwhile, the Senate’s version only has an eighth of those cuts. Another confusing factor is that the vast majority of the debate centers on the Supplemental Nutrition Assistance Program (SNAP), which used to be called food stamps. SNAP constitutes a huge portion of the budget, so it is where the real contention lies regarding the amount of cuts.

The experts think the gap between the House and Senate versions of the farm bill is just too big to reconcile, even before figuring in the demands that the House budget proposal is making. If the conference committee can’t find a compromise, then the talk is that that another committee will take over the farm bill. This is a new committee that’s been given the task of developing a comprehensive budget, and it will take over the farm bill as its needs to claim the cuts in its calculations in order to avoid the deeper cuts that will take place Jan. 1 due to the sequester.

There are substantive differences between the House and Senate versions on matters that truly pertain to agriculture, but they’re actually relatively minor in comparison. The interesting thing is that if this new committee takes over the farm bill, what emerges could be drastically different than either the House or Senate versions.

One would think such a prospect would increase the impetus for the House and Senate to get something done immediately. However, given recent history, the odds are in favor of the farm bill getting caught up in the overall budget debate.

There already have been attempts to break out the nutrition title from the farm bill, which is where the majority of disagreement resides. But the attempts have failed, so the farm bill will continue to be held hostage by the SNAP debate.

In 2009, the federal economic stimulus increased SNAP funding by about $5 billion; that goes away in November if a farm bill isn’t passed. Thus, the lack of agreement will actually result in a decrease in SNAP funding – about $1 billion larger than even the bill passed by the House. It seems like there’s every incentive to act quickly, but little hope that Congress will be able to.

 

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The freak autumn blizzard in South Dakota also should be adding impetus for quick action. Both the House and Senate versions would reinstate the Livestock Indemnity Program (LIP) that expired in 2011, and would retroactively reinstate the program for 2012 and 2013. This would provide some relief to affected producers. Before anyone gets overly excited about the chance of relief via the LIP program, however, bear in mind that any payments wouldn’t occur for an additional seven months after approval.

Are you confused? Everything is being driven by the budget battle, and any resolution to our fiscal woes seems unlikely anytime soon. As a result, the farm bill will likely be held in limbo, unless the conference committee acts quickly to resolve the differences.

 

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