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Report: Farm bill more unlikely than ever

By Larry Dreiling

The fiscal cliff continues to loom over budget negotiations and with it, the chances for passage of a new farm bill.

According to a report in the Dec. 19 edition of Politico, sources are saying House Speaker John Boehner won't include the farm bill in any budget deal for fear of losing more Republican votes.

The House and Senate farm bills promise savings between $24 billion and $35 billion over 10 years, chiefly from food assistance and crop insurance. But Boehner believes adding a farm bill is too cumbersome at this stage and it is better kicked over to a new Congress.

"We can't drop a farm bill in the middle of whatever is negotiated. A 1,000-page bill on top of whatever is negotiated will just make our vote situation harder," a Boehner aide told Politico. "If we can agree on a top-line number, we suspect the committees will have a much easier time getting to a bill next year under regular order."

This rankles farm bill supporters, since it was Boehner who blocked the House Agriculture Committee from even bringing its five-year plan--which was 594 pages, not 1,000--to the House floor before the election. And Senate Agriculture Committee Chairwoman Debbie Stabenow of Michigan is still rooting for a "Christmas miracle."

Politico reports Stabenow may have hurt herself by so aggressively--and publicly--criticizing a House offer on the commodity title. And having stayed out of the farm bill debate for much of this year, it is harder for Secretary of Agriculture Tom Vilsack to assert himself now.

"There is enormous frustration that nothing is getting done. The biggest problem is the system really is broken," one commodity lobbyist complained to Politico. But he admitted, too, "$7-a-bushel corn doesn't ring the phone as much."

What will ring now is a holiday season fight now over a threatened spike in milk prices when the current dairy program expires Jan. 1, 2013.

Indeed, if a deficit deal is reached with the White House, the best hope for farm bill supporters may be to have the agriculture committees included in an expedited deficit reduction and tax reform package to be completed next summer. This path has not been ruled out by Boehner and would likely set an August deadline for action.

But beginning in May with winter wheat, farmers will have their own calendar to follow. And another layer of extensions will be needed to bridge this gap, as early crops are harvested and new ones planted. If August becomes the new deadline for action, it also raises fresh questions about the fate of direct cash payments to producers due in October.

The milk crisis is more immediate and stirs enough passions that it could spill back on the deficit deal.

Without an extension by Jan. 1, dairy policy reverts to a 1949 law that prescribes a post-World War II vision of a more muscular government buying up dairy products directly to boost prices. The U.S. Department of Agriculture would pay producers $38.54 per hundredweight compared to a market now running near $16.22. The result could be a possible doubling in consumer prices for milk.

"I will do what the law requires me to do," Vilsack said at a recent press conference. "It's fair to say milk prices will increase, and that's an unfortunate circumstance...Consumers shouldn't have to have higher milk costs because Congress can't get its work done."

This raises the question of some interim action. And just as important, will that stopgap include new dairy security provisions, including a controversial milk stabilization program, as part of any such extension?

Boehner has strongly opposed the stabilization language because of his own home state's dairy interests in Ohio. But in this case, House Agriculture Committee Chairman Frank Lucas of Oklahoma has thrown in with Ranking Democrat Collin Peterson of Minnesota considered the chief architect of the dairy security reforms.

Peterson has adamantly opposed any extension because he wants to keep the pressure on for a five-year farm bill deal. But he told Politico Dec. 18 that he believes that goal is "dead for this session" and his focus is on getting an extension acceptable to the producers with whom he has been aligned.

That would have to include his Dairy Security Act with supply management tools to try to stabilize milk prices--a major priority for many producers, including some large dairy co-operatives, but strongly opposed by processors, such as companies like Kraft and Dean Foods.

"I've come to the conclusion that is it's dead for this session," Peterson said of the five-year farm bill he and Lucas reported from their committee in July. But the Democrat said he also warned the White House that any farm bill extension--without the dairy language--risked a backlash from him and dozens of House lawmakers.

"I told the White House that if the dairy bill is not in, I will oppose the debt deal," Peterson told Politico. "I think I have 40 to 50 people who will follow me on that. I basically told the White House that you'd better be careful."

Lucas told Politico that he had had a brief conversation with Boehner Dec. 16 in which the speaker assured the chairman, "Don't worry, you'll be fine."

"That can mean anything. That can mean nothing," Lucas said. "If I were a speculating person, I'd say by definition that means an extension. And it has to address dairy in some fashion."

"Neither I nor the committee has been asked for specific language. You have to believe that leadership can't write a farm bill by them, they can't write an extension by themselves. They will need information."

Looking ahead to the new Congress, Lucas says he is already planning to start anew with a House farm bill markup in late February.

"If I had a bill I could agree with the Senate on, there would be a lot more options. But I don't have that document yet," Lucas said. "I'm between a rock and a hard place. I'm squeezed in the middle."

Larry Dreiling can be reached by phone at 785-628-1117, or by email at ldreiling@aol.com.

Date: 12/24/2012

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