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Farm bill expires, blame game and fallout begins

Farm bill expires, blame game and fallout begins
October 1 is the first day of the 2008 farm bill’s expiration. Agriculture groups marked the occasion with a series of statements underlining the importance of new farm legislation for rural America. Democrats marked it by scolding House leadership for not bringing the legislation to a vote since it was passed out of the House Agriculture Committee in early July.

October 1 is the first day of the 2008 farm bill’s expiration.

Agriculture groups marked the occasion with a series of statements underlining the importance of new farm legislation for rural America. Democrats marked it by scolding House leadership for not bringing the legislation to a vote since it was passed out of the House Agriculture Committee in early July.

“While expiration of farm bill program authorities has little or no effect on some important programs, it has terminated a number of important programs and will very adversely affect many farmers and ranchers, as well as ongoing market development and conservation efforts,” said a joint statement released by, among others, the American Farm Bureau Federation, the American Soybean Association, National Corn Growers Association and National Council of Farmer Cooperatives.

The group said in the absence of a new farm bill the main challenge “will be in planning for 2013. This includes lining up the critical financial assistance needed from lending institutions which prefer, if not demand, to see business plans presented in black and white. That will be difficult when producers don’t know when to expect a new farm bill -- or what type of financial safety net is likely to be included in that bill.”

For full farm bill coverage, see here.

Striking the same chord, Michigan Sen. Debbie Stabenow, chairwoman of the Senate Agriculture Committee said, “It is unbelievable that we're in this position now where the farm bill will expire and create so much uncertainty for farmers, ranchers, and small businesses.”

The expiration, said Agriculture Secretary Tom Vilsack on Monday (Oct. 1) afternoon, will quickly impact “many” programs administered by the USDA.  “I think it’s important for folks to know that there are a number of programs – very important programs – that expired, or are frozen, absent Congressional action. There are deep concerns about the uncertainty this has caused for producers.”

Speaking from Wisconsin, Vilsack said residents of the state “are well aware of the fact that the dairy industry will no longer be able to take advantage of the MILC (Milk Income Loss Contract Program) program…

“I have particular sensitivity to the dairy industry because it’s been under a great deal of stress and pressure. The last thing it needed was for Congress to leave town early, not get its work done and put these producers in a position where they no longer even get the MILC payment, which may have been very significant for a number of producers facing difficult situations with their profitability being impacted by high feed costs.”

While dairy producers may receive a check, or two, after October 1, “that’s because of what they were entitled to receive prior to (the farm bill expiration). … If a dairy producer has an FSA loan and was counting on the continuation of MILC, that producer will probably have to go into an FSA office and see if there’s any way of providing some latitude.”

Vilsack insisted this would cause “a rippling effect” in the countryside.

Further, “I think there will probably be extensive pressure put on our credit programs.” That isn’t just for those who wonder how to “continue to make payments but also folks who won’t be able to convince a commercial banker to provide the resource absent a guarantee by the FSA. That commercial banker isn’t sure what the safety net is going to be because there is no safety outside crop insurance.”

Vilsack also believes ranchers who are “stretched may also be faced with serious credit issues.”

Other impacts, lame duck worries

Other programs impacted are the Specialty Crop Block Grant program and Specialty Crop Research Initiative that won’t be continued “absent passage by Congress of a (farm bill),” said Vilsack.

Conservation Reserve Program new contract sign-ups are now frozen while the USDA is “somewhat limited” on the CSP (Conservation Stewardship Program). “We still have some resource that can be used. But that resource could be used up fairly quickly and we won’t get anywhere near the Congressional mandate is relative to the number of acres they’re interested in enrolling in CSP.”

Export assistance is also reduced. “On the Export Assistance Program, we’re not going to be in a position to provide directly the help and assistance we’ve provided through the Market Access Program and some of the other trade promotion programs,” said Vilsack.

The USDA also will not “provide any additional assistance” to the Beginning Farmer and Rancher Development program.

These are only some of the “casualties of Congressional inaction,” said Vilsack. “It’s unfortunate but, hopefully, when Congress returns after the election they’ll focus on the five-year (farm bill) done, starting with the House completing its work.”

The lack of a farm bill has caused “a great deal of stress. It didn’t have to be. There was plenty of time to get this done and there were the votes, in my view, to get it done.”

The reason it wasn’t, said Vilsack, “is there are folks in Congress who want to have much deeper and more significant cuts – not just to the nutrition programs but to the farm safety net, crop insurance, subsidies and conservation payments in the Commodity Title. They weren’t interested in having that conversation before the (November) elections. They prefer to have it afterwards.”

And lurking in the shadows is the possibility of sequestration. If the budget deal wrangled by the White House and Congress goes into effect, Vilsack said for most USDA programs it would mean “an across-the-board reduction line item at USDA … of about 8.2 percent. That would have a significant impact on the availability of offices and personnel to administer programs.”

Sequestration would “likely” mean “the need for furloughs in the food inspection area. Of course, a furlough could result in the potential for shutting down processing. If there isn’t an inspector, you can’t keep the plant open.”

The coming lame duck session “will feature a plethora of important issues that have also gone unresolved by this Congress, including the sequestration process, numerous tax and spending issues, and U.S. Postal Service reform,” said Roger Johnson, National Farmers Union president. “Therefore, it is absolutely critical that House Speaker John Boehner brings the farm bill to the floor early in the session to ensure it can be conferenced and finalized before Congress returns to their districts yet another recess in December.

“The longer Congress drags its feet, the harder their inaction will be felt by farmers, ranchers and, ultimately, all Americans.” 

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