Farm Bill: One down, One more to go

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About all farm bill watchers used the same language in describing the Senate’s approval of its farm bill proposal, “Major change is coming to agriculture.” With a bi-partisan vote, Senators approved the Agriculture Reform, Food and Jobs Act. Now the spotlight turns to the House, which is planning to vote early next month on its proposal. Expected to be significantly different from the Senate version, some House and Senate Ag Committee members will spend part of their summer in a conference committee to work out the differences.

The House Ag Committee has been told by House budget leaders to cut much more than the $23 billion from the budget, which was the reported savings calculated for the Senate bill. The Senate Ag Committee initially described the legislation as a bill that eliminated direct payments and strengthened risk management by putting more emphasis on crop insurance as the keystone of the agricultural safety net. The Senate also attempted to increase the accountability of those receiving food assistance in farm bill nutrition programs. The legislation was also seen as facilitating programs that would foster job growth in bio-based manufacturing, bio-energy, and rural development initiatives. According to the Congressional budget office the 10 year cost is $969 billion, which is $23 less than if the 2008 program were continued.

The full Senate voted 64-35 to approve the proposal after sorting through 73 amendments, and while he complimented the Senate Ag Committee for pushing the bill through, House AG Committee Chairman Frank Lucas  said don’t expect similar legislation from the House.  But ranking member Collin Peterson said, “If the House Ag Committee passes a bipartisan bill in early July, House leadership will then have little choice but to bring the farm bill to the floor before the August recess.” 

However, not everyone complimented the Senate on the action, particularly those who represent southern constituencies. One of those was Georgia Republican, and former Ag Committee Chair Saxby Chambliss, “Sen. Saxby Chambliss, R- Ga., voted against final passage of the bill, due to concerns over the crop insurance program. He said the bill “seeks to establish a one-size-fits-all program rather than recognizing the limitations of crop insurance for certain regions of the country, namely the Southeast.” He does not like the Agriculture Risk Coverage program that reimburses farmers with “shallow losses” in crop insurance because it eliminates high direct payments that southern farmers had been getting for their crops, “If this bill were to become law without significant changes, producers in the Southeast would be left without an effective safety net.”

The full Senate adopted several restrictions on the safety net. Adopted amendments include:

  1. An amendment to reduce premium subsidies by 15% for farmers or legal entities with adjusted gross income above $750,000.
  2. An amendment limiting market loan gains and loan deficiency payments under the Agriculture Risk Coverage program to under $75,000.
  3. Another amendment requires farmers to comply with conservation requirements to receive subsidized crop insurance.

Following the Senate vote, Agriculture Secretary Tom Vilsack said, “I am grateful for the Senate’s progress toward providing a reformed safety net for producers in times of need, supporting agricultural research and trade promotion, honoring World Trade Organization commitments, furthering the bio-based economy, conserving our natural resources, strengthening local and regional food systems, and promoting job growth in rural America.”  But he indicated that whatever the House proposes, may be different from the Senate Bill and what the administration was seeking, “As the legislative process moves forward, the Administration will continue to seek policy solutions and savings consistent with the President’s Budget, and we are hopeful that the House of Representatives will produce a bill with those same goals in mind.”

Summary
A 2012 Farm Bill is almost halfway to fruition. The Senate has approved a bill with bi-partisan support, but now the House must act and that is scheduled for early July. Because of significant philosophical differences on spending and nutrition program support, the proposals will likely have major differences, and will require additional work by a conference committee. The Senate plan eliminates direct payments, bolsters crop insurance, but restricts access to crop insurance by a financial means test.


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