Lawmakers in Washington are betting on their ability to achieve last minute deals while farmers around the country face deeper uncertainty about federal policy than in recent memory.
Agriculture watchers in Washington continue to be consumed by high-stakes negotiations related to the fiscal cliff and a farm bill that could possibly be worked into it.
Congressional agriculture leaders have been diligently meeting this week to find middle ground around the most controversial portion of the bill, the farm safety net title.
(For more, see: Will the next farm bill be the last?)
As those talks continue, negotiations on a package to avert the fiscal cliff – the combination of tax increases and federal spending reductions set to go into effect at the first of the year – are being conducted chiefly by just two people, House Speaker John Boehner (R-Ohio) and President Barack Obama.
Offers and counteroffers have been exchanged in both sets of talks but no conclusions have yet been reached and compromise seems elusive.
Success in both negotiations before the end of the congressional session is essential to any semblance of regulatory certainty for farmers.
The fiscal cliff would raise a slew of taxes, most notably for farmers the estate tax, dropping estate tax exemptions from $5 million to $1 million while skyrocketing rates from 35 percent to 55 percent.
(For more, see: Financial uncertainty in farm country over TAG program)
The fiscal cliff would also trigger sequestration cuts that are expected to disproportionally hit essential but relatively low-budget programs working on trade promotion, agricultural research and other priorities.
Adding to the pressure, few pieces of legislation are moving in Congress while the fiscal cliff talks continue, which dramatically limits the vehicles for any farm bill language to come before Members.
Meanwhile, the outcome of the farm bill talks will determine what safety net is available for the nation’s crop farmers, many of whom have faced significant weather challenges this crop season.
Traditional farm programs in Title I technically expired with the 2008 Farm Bill on Sept. 30. If no new farm bill is approved by the first of the year, USDA will be forced to begin implementing underlying farm law, which dates to 1949 and contains such regulatory anachronisms as parity prices and planting quotas.
By Jan. 1, the existing milk support program would be off the books, and the dairy industry projects in-store costs for milk could quickly rise to $6 per gallon.
Most critically for the wheat industry, the failure of farm bill talks would mean the end to funds flowing through the Market Access Program (MAP) and the Foreign Market Development (FMD) program to non-profit cooperating organizations like U.S. Wheat Associates, effectively stopping their work to promote U.S. commodities overseas.
These and other consequences would likely continue well into the new year while the new Congress organizes and works toward passing new farm legislation with much less funding and a vastly changed political landscape. It’s unlikely any new bill could be considered before early spring.
NAWG and other agriculture organizations strongly support the approval of a five-year farm bill before the end of the Congressional term. NAWG staff and grower-leaders continue communication with Hill leaders and will continue to report to state associations as new information develops.