5 Questions: Policy specialist wonders if another farm bill extension is on the way
August 5, 2013
There's been much farm bill noise made this month in Washington.
Brad Lubben — an agriculture economist at the University of Nebraska-Lincoln, who specializes in public policy — took time out of his schedule recently to discuss what's been going on and what the future might hold for farmers in Colorado, Wyoming, western Nebraska and elsewhere.
Below are portions of those conversations:
Q. So where do we stand now, as far as the farm bill goes?
A. The U.S. House of Representatives made some progress, passing a farm-only bill, by a 216-208 vote.
The food and nutrition parts of the farm bill (which account for about 80 percent of the dollars allocated toward farm bill spending, and what has been the biggest source of controversy in getting a new farm bill passed) was not discussed.
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Q. Now that the House passed this farm-only bill, what's the process now?
A. The process now is actually a bit murky.
While there were no discussions on food policy, the House has at least passed a bill … and because of that, can meet with the Senate in committee to settle differences between the House's bill and the Senate's version of a food and farm bill.
But what exactly will happen is uncertain.
We could still see the House come back and try to pass a comprehensive food and farm bill before going into committee. There was some talk about the House bringing forward a food-only bill for consideration.
Either would give the House a food and farm bill to take forward.
Without a food portion, the House doesn't have a legislative piece to stand on in any food-policy negotiations with the Senate.
The House might still try to negotiate hard in committee on food policy … but it would be easier for negotiations if the House had actual policy in place to work with.
Q. As far as the farm policy that just passed, were there any changes made to what the House had been pushing for in its previous attempts of passing a farm bill?
A. Essentially, the House brought forward the farm policy from its discussions in June.
However, it did change language that could have a significant impact … and that deals with the permanent legislation in place from several decades ago.
Modern farm bills are written with expiration dates, meaning if legislation expires without a new farm bill in place, things revert back to the old, permanent legislation.
But, as it is written in the language of the House's farm policy that just passed, the new permanent legislation would become what's being negotiated now … instead of 1930s and 1940s legislation.
But you have farm organizations and others who don't like that.
The risk of reverting back to 1930s and 1940s legislation has always put pressure on lawmakers to pass new farm bills.
In addition to farm organizations being against it, it's also probably a non-starter with the Senate.
Q. Who, in your opinion, has been impacted most by the continued dragging out of the farm bill talks?
A. I think it's a fair assessment to say the dairy industry faces the most uncertainty.
Crop programs will see a change … a further push toward a revenue-based, insurance program, instead of direct payments.
But it's a change … not a new risk.
We're already seeing an overwhelming number of more farmers buying crop insurance … so there's no great change from what's already going on.
But for dairy producers, there's uncertainty in how their safety net program will work in the future.
Right now, there's the MILC program (Milk Income Loss Contract), which essentially provides support when milk prices fall.
But it's not necessarily triggered when feed prices are high and impacting profits.
That's why, through farm bill talks, we've seen an emphasis toward a profit margin-based safety net, rather than a milk price safety net.
That would be a substantial change for dairy producers. It might work … but without knowing what will be in place, it's pretty hard for dairymen to plan into the future with any certainty.
Q. So we've made some progress, but we're also getting closer to Sept. 30, when the farm bill extension in place — approved months ago — expires. Is there a good chance we can get a farm bill passed before that date?
A. Well, let's take a look at a potential timeline.
If the House has now passed a farm-only farm bill, the House at least now has a vehicle to get to committee with the Senate … but that will be a challenge.
How soon do you end up with any compromise on a farm and food bill?
The people that just passed a farm policy-only farm bill in the House may not vote for whatever compromise comes out of the House and Senate conversations.
How likely is it that they come back to both chambers and pass this?
It's likely that we approach the Sept. 30 deadline and not have an answer.
That happened last year … and then we ended up with the extension that's now in place.
So there's a good chance we do that again.
And if we get into late 2013 and pass a farm bill, there's probably not enough time to write the rules for these programs, so that they would be in place on Jan. 1 of 2014.
It could be 2015 when we have new programs actually going into place.
It's a little too early to say that, but we're at a point now to where we ask whether any 2014 rule making is feasible. ❖