Despite no farm bill, wheat farmers remain resilient
The 2008 farm bill expired on Sept. 30 with no replacement legislation in place to provide an ample safety net for America's farmers and ranchers.
Congress recessed until after the November elections, leaving an anticipated lame-duck session as the next possible time for work on a five-year farm bill. However, what comes out of that work period will depend heavily on election results. If a full farm bill reauthorization is not completed before the end of the year, legislators could be faced with dramatically fewer dollars in the bill's baseline, which will be updated in January and again in March. The only other farm bill to be enacted in a lame duck session was the 1990 bill, and it is unprecedented for a farm bill to be reintroduced in a new Congress after failing to achieve passage in a previous Congress.
The farm bill's expiration has terminated a number of important programs and will adversely affect many farmers and ranchers. Affected subjects include the Foreign Market Development Program, a cost-sharing trade promotion partnership between USDA and U.S. agricultural producers and processors. The program pools technical and financial resources to conduct overseas market development. That funding, as well as specific funding for personnel to run the program at USDA, will run out at the end of October. Since 31 percent of our gross farm income comes from exports which also make a positive contribution to our Nation's trade balance, trade promotion is an important part of our safety net.
About 6.5 million acres rotate out of the Conservation Reserve Program this year. While current contracts are protected, no new sign-up will be allowed for CRP or the Conservation Reserve Enhancement Program. Both of these programs are voluntary land retirement programs that help agricultural producers protect environmentally sensitive land, decrease erosion, restore wildlife habitat, and safeguard ground and surface water. In addition, there cannot be sign up for the Wetlands Reserve Program or the Grasslands Reserve Program.
Many programs are left relatively unscathed.
Almost 80 percent of the farm bill's cost is for nutrition programs--primarily the Supplemental Nutrition Assistance Program, formerly commonly known as food stamps. Most recipients of nutrition program benefits will not be affected because the SNAP program did not need to be extended. Funds for nutrition assistance programs will continue to be provided to those Americans without issue.
Farmers and ranchers who manage their risks using the farm bill's crop insurance provisions will be unaffected because, like SNAP, those programs don't expire. Even if Congress were to do nothing in the lame-duck session, farmers will continue to have access to crop insurance programs. However, improvements to crop insurance that were included in both the House Ag Committee and Senate versions of the farm bill will not go into effect until a new farm bill is completed. These improvements include allowing irrigated and non-irrigated acres to be split under enterprise-unit plans and using a 70 percent of T-Yield plug when a producer may experience a disaster. The main challenge, however, will be in planning for 2013. This includes lining up the critical financial assistance needed from lending institutions which prefer, if not demand, to see business plans presented in black and white. That will be difficult when producers don't know when to expect a new farm bill--or what type of financial safety net is likely to be included in that bill.
Justin Gilpin, chief executive officer of Kansas Wheat, says America's farmers will continue to proceed with business as usual, despite the lack of certainty regarding federal farm programs.
"Farmers are ever-optimistic. Many Kansas wheat farmers are putting seed into the ground right now, with the expectation of harvesting a bumper crop next summer," he says. "In the same fashion, farmers believe Congress will return to Washington, D.C., after the November elections and do their job - pass a Farm Bill as soon as possible and give this nation's producers the safety net they deserve."
Kansas Wheat is the joint agreement between the Kansas Wheat Commission and Kansas Association of Wheat Growers, joining together as "Leaders in the Adoption of Profitable Innovations for Wheat."