By Greg Wolf
Agricultural policy might be boring if it weren’t so relevant—and too, those of us who have heard Barry Flinchbaugh take up the subject would never consider it boring. Flinchbaugh even makes the term “agricultural policy” itself interesting. I had him in an Agricultural Policy class years ago and have heard him give updates through the years at various ag conferences, always vividly enlightening the subject.
It seems we are at a unique juncture with farm legislation, and in language ag people can relate to, the process seems to be “stuck.” After a couple of historic failures to pass a new farm bill, there is talk of congressional “ineptness” and “splitting” the farm issues from the food issues involved. Both seem to signal a new era in farm legislation that in a relative sense has usually progressed fairly smoothly. Time will tell how this process unfolds, but there are many possibilities, and nobody seems to have a good sense of where this will end up. To provide a personal perspective at this juncture I asked my colleague Wayne Myers for an update. He graciously complied and while there may be more news on this front by the time this reaches print, his insights below still provide a timely commentary on the process itself.
Will Congress pass a new farm bill?
“So much uncertainty around this question. Hello, I am Wayne Myers, Director of Kennedy and Coe’s Farm Program Group. I have never seen so much turmoil around farm legislation as we have had these past two years—and I’ve seen a lot of farm bills. I first began my USDA career some 38 years ago as a county executive director with the Agricultural Stabilization and Conservation Service in Kittson County, Minn. I quit the U.S. Department of Agriculture 24 years ago to join Kennedy and Coe, LLC, an agriculture accounting firm, and have continued working with ag producers across the U.S. on farm program opportunities and issues.
“The people I have developed an association with over these past 38 years generally have a pretty fair idea where farm legislation is headed but not this year. For two years now the House has failed to pass a farm bill. Of course this lead to an extension of the 2012 farm bill for 2013. Now the House is attempting to separate the Supplemental Nutrition Assistance Program (food stamps) program from the farm bill legislation with hopes to garner enough support to pass the farm bill. Even if this is successful there is a difficult job ahead to get this through “Conferees” committee, get it passed by the full House and Senate then signed by the president.
“My guess: I think we are looking at another extension for 2014. No one likes the current farm program but apparently it seems better than proposed legislation. One thing is certain and that is we are not going back to permanent farm legislation (i.e., the 1938 and 1949 Act). It has been suggested that milk prices would rise to $7 per gallon under this scenario.
“So during this time of great uncertainty I suggest that you be sure and complete Direct and Counter-Cyclical Program sign-up by Aug. 2 and certify your acreage with Farm Service Agency by your county final reporting date. By the way, there is no penalty for late filing an acreage report for 2013 as long as you file by Sept. 30.
“Maybe we will all be surprised with a new five year farm bill by Christmas!
“Recently, the House separated the SNAP program from the farm bill portion of the legislation and passed the farm bill portion. In addition, the bill repeals the permanent farm legislation in the 1938 and 1949 Acts. This has created great controversy regarding how the differences between the Senate version of the farm bill and the House might be reconciled. If somehow they are, and these provisions remain, and the president signs the bill, what will this do to future farm legislation?
“For many years it has been the permanent legislation that has forced Congress to pass a new farm bill. Also, as 80 percent of the farm bill has been the food stamp program, it has generated support from urban legislators that otherwise may not have given any attention to farm legislation alone.”
I’ve been awfully curious what Dr. Flinchbaugh has had to say about the current process. I haven’t had any contact with him of late, but did note a recent quote of his regarding “splitting” the bill: “They are saying it would likely result in the defeat of both measures. Reality is the urban vote can take care of food stamps without rural support, but the rural vote cannot provide a safety net for farmers without urban support.” It will be interesting to how the trajectory of agricultural policy changes in coming months.
Editor’s note: Greg Wolf is a consultant with Kennedy and Coe, LLC (www.kcoe.com) and works to help clients of the firm navigate toward better returns in all areas of their businesses. He is based in the firm’s Pratt, Kan., office and can be reached at 620-672-7476.