Farm bill expires; Renewal uncertain
By Larry Dreiling
The 2008 farm bill expired Sept. 30, and the 2012 farm bill needed to replace it is bottled up in Congress. While the Senate and the House Agriculture Committees were both able to pass their versions of the new farm bill, the full House was unable to do so.
While expiration of farm bill program authorities has little or no effect on some important programs, a group of more than a dozen farm groups issued a statement saying it has terminated a number of programs and will very adversely affect many farmers and ranchers, as well as ongoing market development and conservation efforts.
Also among those fretting about the bill's expiration was Secretary of Agriculture Tom Vilsack.
"Many programs and policies of the U.S. Department of Agriculture were authorized under the Food, Conservation and Energy Act of 2008," Vilsack said Oct 1. "These include a great number of critical programs impacting millions of Americans, including programs for farm commodity and price support, conservation, research, nutrition, food safety, and agricultural trade.
"As of (Oct. 1), USDA's authority or funding to deliver many of these programs has expired, leaving USDA with far fewer tools to help strengthen American agriculture and grow a rural economy that supports one in 12 American jobs. Authority and funding for additional programs is set to expire in the coming months.
Without action by the House of Representatives on what Vilsack calls "a multi-year Food, Farm and Jobs Bill," rural communities are being asked to shoulder additional burdens and additional uncertainty in a tough time.
"As we continue to urge Congress to give USDA more tools to grow the rural economy, USDA will work hard to keep producers and farm families informed regarding those programs which are no longer available to them," Vilsack said.
Sen. Debbie Stabenow of Minnesota, chair of the Senate Agriculture Committee, called the action by House Republicans to not pass the farm bill "unacceptable."
"It is unbelievable that we're in this position now where the farm bill will expire and create so much uncertainty for farmers, ranchers, and small businesses," Stabenow said. "The Senate came together in a bipartisan way and we passed the farm bill. The House Agriculture Committee came together in a bipartisan way to pass a farm bill. It's absolutely unacceptable that the House Republican leadership couldn't devote just one day to rural America and the 16 million jobs across the country that rely on agriculture."
In a statement, Stabenow said U.S. dairy farmers, seeing the end of the Milk Income Loss Contract program will be among the first impacted, which could cause the price of milk to increase.
"Families across the country cannot afford to see the price of milk skyrocket because the House Republican leadership didn't get its work done. In the next few months, we transition to permanent law, a collection of policies from the 1930s and 1940s that are ill suited to the way farmers work today," Stabenow said. "When those policies kick in over the next few months, it will be farmers and families who truly pay the price for the House Republicans' inaction."
Despite this, Stabenow said she wasn't giving up.
"As soon as Congress comes back, the farm bill needs to be a top priority in the House of Representatives," Stabenow said. "I hope that the House Republican leadership will devote the first day back to creating jobs in rural America and cities across the country. Farmers, ranchers, small businesses, and our entire economy will continue to be impacted every day they do not act."
In a statement the National Milk Producers Federation said farmers need to continue to voice their dissatisfaction with the lack of action in Washington on farm policy.
"Dairy is among the first sectors in agriculture to feel the impact of Congress's inability to reach accord on most anything, including a new farm bill," said NMPF president and CEO Jerry Kozak. "Had the House leadership brought the bipartisan farm bill to the floor, I believe we could have passed a bill containing the Dairy Security Act. Instead, we are in uncharted waters, and one of our life rafts has disappeared."
Dairy farmers continue to suffer from high feed costs, and the other program intended to serve as a safety net-- the dairy product price support program--was created years before feed costs started to escalate, Kozak said.
That's why NMPF has been urging Congress to pass the Dairy Security Act, which instead of focusing on milk prices, takes into account the margin between farm-level milk prices and feed costs.
"We strongly encourage our dairy farmer members to visit with their members of Congress during the pre-election recess to determine a path forward for the 2012 farm bill soon after the elections," Kozak said. "We need a full, five-year bill to be passed in the House, sent to a conference committee, and approved before the end of the year."
MILC compensated dairy producers when domestic milk prices fall below a specified level. Without a new farm bill, dairy farmers are left with uncertainty and inadequate assistance. While milk prices are high enough that the price support program doesn't kick in, there is no other safety net to help battle the highest feed costs on record.
The groups issuing the joint statement on the end of the farm bill are: American Farm Bureau Federation, American Pulse Association, American Soybean Association, National Association of Conservation Districts, National Association of Wheat Growers, National Barley Growers Association, National Corn Growers Association, National Council of Farmer Cooperatives, National Farmers Union, National Milk Producers Federation, National Sunflower Association, United Fresh Produce Association, USA Dry Pea and Lentil Council. U.S. Canola Association, and Western Growers Association.
The groups lamented the end of other programs including:
--The Foreign Market Development Program. FMD is 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.
Many farmers, ranchers and agribusiness or agricultural processors benefit from the FMD, as it maintains and increases market share by addressing long-term foreign market import constraints and by identifying new markets or new uses for the agricultural commodity or product in the foreign market. 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 U.S. gross farm income comes from exports that also make a positive contribution to the nation's trade balance, trade promotion is an important part of the safety net, the groups said.
"Other countries will most certainly take advantage of the fact that the program is rendered inoperable and will do what they can to steal our markets--and everyone knows; the hardest market to get is the one you lost," the statement continued.
--The Conservation Reserve Program will see about 6.5 million acres rotated out 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.
"Both versions of the new farm bill contain funding for the disasters facing the livestock industry due to the drought. However, programs are currently only available for lack of forage, as well as death of animals," the statement said.
"Most producers of fruits and vegetables do not have a safety net, but instead receive funding to augment the competitiveness of specialty crops through programs that enhance trade, promote cutting-edge research, and implement on-the-ground projects to protect crops from disease and invasive species. Funding for these programs ended when the farm bill expired."
Numerous other programs, including energy, agricultural research, rural development and funding for new and beginning farmers could be added to this list of affected programs. The bottom line is that while expiration of the farm bill causes little or no pain to some, others face significant challenges.
Programs not affected by the expiration of the farm bill include 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. Nor do some of the conservation-related programs. In addition, the 2008 farm bill, for the most part, covers most commodity-specific programs, since it applies to the 2012 crop year, rather than the 2012 fiscal year.
"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," the statement said. "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.
"Congress will return in mid-November for a lame-duck session prior to final adjournment in December. We will work to have the first order of business for the House of Representatives be to consider a new farm bill."
The statement concluded: "We are urging our members to seek out their House members between now and the elections and remind them of the consequences of not having a new bill in place prior to adjournment at the end of the year."
Larry Dreiling can be reached by phone at 785-628-1117, or by email at email@example.com.