Fiscal cliff solution may include farm bill language

Fiscal cliff solution may include farm bill language

If budget negotiators are unable to agree to a long-term solution on farm bill issues over the next few weeks, farmers are looking at a one-year extension of most provisions of the current 2008 farm bill, including direct payments.

The longer President Obama and House Speaker John Boehner argue over how to avoid the so-called “fiscal cliff” tax and spending crisis, the less likely farmers are to get a new farm bill in time for the 2013 crops.

“Given the point where we are in the year and the point where we are in the fiscal cliff discussions, I think the only way we are going to see a new five-year farm bill in place is that it’s done as part of the fiscal cliff discussions,” said Reece Langley, vice president, government affairs for the USA Rice Federation.

“If the Congressional Republicans and the White House can agree on a package, then we think is likely that the new farm bill will be a part of that broader package, largely because the new farm bill will result in overall budget savings somewhere in the range of $25 billion to $35 billion. That could be used in structuring this package.”

If budget negotiators are unable to agree to a long-term solution on the issue over the next few weeks, Langley believes farmers are looking at a one-year extension of most of the provisions current 2008 farm bill, including direct payments.

Speaking at the USA Rice Outlook Conference in San Diego on Dec. 11, Langley said Rep. Frank Lucas, chairman of the House Agriculture Committee, has indicated he would prefer a one-year farm bill extension if no agreement on avoiding the cliff is reached.

“The extension would largely be a continuation of current policy, including direct payments. The amount of payment for next year might have to be reduced to pay for some other things as part of the extension. But I don’t think we’re looking at a significant level of cuts.

Langley and his co-presenter, Dr. Joe Outlaw, co-director of the Agriculture and Food Policy Center at Texas A&M University, agreed that an extension might be preferable because of the difficulty of implementing a new farm law in time for 2013.

“There’s been a lot of talk from other groups about how this would be impossible to achieve or is unlikely to happen,” said Langley, “but I think the reality is that trying to implement a new farm bill at the start of a new planting season doesn’t make a whole lot of sense for you or your lenders or your planning.

“I think the longer this drags out the more and more likely it is we will get a one-year extension or transition period until we get a new farm bill.”

Rice not only controversy

Rice leaders have been concerned at how the different commodities are treated under the Senate version of the farm bill almost since the day it was unveiled in the Committee on Agriculture, Forestry and Nutrition last spring.

Under the CBO’s 10-year baseline that is calculated for all commodities, rice originally was assigned funding of $4.3 billion per year. Both the Senate and House Ag Committees set out initially to reduce spending by 30 percent or to about $3 billion, using the rice baseline figure.

The House Ag Committee bill, which has yet to reach the House floor for a vote, contains $3.2 billion in spending for rice while the Senate Ag Committee bill, which was passed by the Senate last May, contains $1.5 billion for rice.

The larger cut for rice growers isn’t the only controversy that has arisen over the differing House and Senate approaches to the next farm bill.

An analysis by Outlaw’s center at Texas A&M and the Food and Agricultural Policy Research Institute or FAPRI at the University of Missouri has drawn criticism from supporters of the Senate bill for its dire predictions of what could happen if the mostly high current price levels for commodities go south.

“I’ve been quoted by a number of reporters lately as saying ‘you don’t do a farm bill for the good times,’” Outlaw said during his farm bill update presentation at the outlook Conference. “’You do a farm bill for the times when things go bad.’ Some people have been critical of those comments.”

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