Clearer farm bill picture beginning to emerge

Clearer farm bill picture beginning to emerge

• While it is likely the House ag committee version will be reworked, a challenge will involve reconciling the differences in provisions between the Senate and House versions • Some observers speculate the House ag version of the bill will never come up to a full vote in the House.

The U.S. Senate and House of Representatives have some reconciling to do to pass a 2012 or 2013 farm bill.

On June 21, the Senate passed its version of the 2012 farm bill titled “Agricultural Reform, Food and Jobs Act” (S. 3240).  Along with other program cuts, the Senate bill reflects significant changes in farm legislation, particularly in terms of how these would affect the commodity and conservation provisions in the 2008 farm bill.

Days later, the House Agriculture Committee unveiled its version of the new farm bill, titled the Federal Agricultural Reform and Risk Management Act (FARRH, H.R. 6083), for review. FARRM includes changes in the commodity provisions and significant cuts in the nutrition title in this version of the new farm bill.

While it is likely the House ag committee version will be reworked, a challenge will involve reconciling the differences in provisions between the Senate and House versions, according to Jim Novak, Auburn University professor of agricultural economics and Alabama Cooperative Extension System economist.

How the reconciliation plays out over the next year or so remains an open question at this point, he says.

“Some observers speculate the House ag version of the bill will never come up to a full vote in the House,” Novak says, adding that reconciliation may involve the full House voting only on the Senate version of the bill. 

(See additional farm bill coverage here).

Lawmakers have also explored the merits of a one-year extension of the 2008 farm bill.

“In any case, a House/Senate conference will be held to iron out differences,” Novak said. “While alternative strategies have been discussed, it remains to be seen which, if any, will ultimately be adopted.”

Commodity loan program provisions of the Senate bill remain essentially the same as the one outlined in the 2008 farm bill. However, both bills repeal all direct payments and ACRE.

The Senate version also repeals the counter-cyclical program payment. The House Agriculture Committee’s bill proposal also repeals ACRE, direct payments and the CCP program, but replaces them with what some are calling a program similar to the counter-cyclical program payment.

Upland cotton provisions

Under both the Senate bill and the House Ag Committee proposal, upland cotton, while remaining eligible for the commodity loan program, would not be afforded price or revenue support as in previous bills.   

A striking feature of the Senate version is its emphasis on risk management choices, which some lawmakers have termed as a “Shallow Loss” program. Within the current bill, it is designed to complement conventional crop insurance coverage.

“The crop insurance title would manage the majority of specific commodity revenue risks,” Novak says, “While the Senate’s Agricultural Risk Coverage (ARC) program would provide supplemental coverage.”

“It would cover losses incurred on individual farms, or the producer could opt to use county acreage averages to secure a level of protection on top of that afforded by crop insurance.”

The House offers risk coverage, characterized by some lawmakers as a Deep-Loss Program, which is designed to take the place of ACRE, direct and counter-cyclical payments. While the House’s deep-loss program is technically a departure from counter-cyclical payments, some farm bill observers have noted a resemblance to this program, Novak says.

Another fundamental difference is reflected in the House Ag Committee version. Under this version, the option to update yields and to participate in a commodity support program is assigned to the landowner.

However, under the Senate bill, producers would be afforded the option to participate in county or individual support options.

“Allowing producers the choice of commodity program options would be a significant departure from past farm bills,” Novask says.

While elements of previous farm legislation is preserved in both proposals, including provisions that apparently preserve base acreage, both these proposals reflect significant philosophical departures from earlier farm bills, he says. This is reflected in provisions calling for removing the eligibility of upland cotton from the commodity price and revenue support list.

One area of contention that may prove to be a major stumbling block toward reconciliation involves the notable differences in proposed cuts for the nutrition program. 

The Senate version of the bill would cut some $4.3 billion from this title, while the House Ag Committee version seeks a considerably higher $16 billion.

Meanwhile, conservation programs are slated for consolidation along with cuts under both bills. 

Upland cotton is moved to the Crop Insurance Title of both House and Senate bills and is given a group risk revenue protection program (STAX) which augments conventional crop insurance coverage.

Budgetary considerations and partisan politics are likely to play a significant role as the two versions are reconciled, Novak says, adding that the partisan divisions within the House are deeper than they have been in years. 

Largely for this reason passing this farm bill will present a fundamentally different challenge from previous bills, Novak says.



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