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Farm bill framework by Christmas, vote in mid-January?

Farm bill framework by Christmas, vote in mid-January?

Food stamp cuts reportedly agreed to by farm bill conferees. Regional commodity title differences still to be resolved. Short-term farm bill extension may pass with eye to new farm bill vote in January.

It appears a short-term extension of current farm law will push any votes for a new farm bill into next January. With House Speaker John Boehner insisting that the House will adjourn for the year on Friday, the extension would provide lawmakers with time to rally around a new farm bill and would be necessary to keep 1949 law from kicking in and sending dairy prices soaring.

Late Tuesday afternoon, Oklahoma Rep. Frank Lucas, chairman of the House Agriculture Committee, said the conference has "made great progress on the farm bill and continue to have productive meetings. There are still some outstanding issues that we are addressing. I am confiedent we'll work through them and finish a farm bill in January. Concurrent with our ongoing discussions this week, I will file legislation to extend the current farm bill through January and allow us to finish our work without the threat that permanent law will be implemented. Having this option on the table is the responsible thing to do in light of our tight deadline."

Lucas pointed out the 2002 farm bill was extended six time before the 2008 farm bill finally passed.

Conferees have also reportedly struck a deal on food stamp (SNAP) funding cuts. Minnesota Rep. Collin Peterson, ranking member of the House Agriculture Committee, said Monday that the cut would be “closer to” the Senate’s $4 billion proposal than the House’s $40 billion. He also predicted the House Republicans would be displeased with deal.

After speaking with House staffers involved in the negotiations, Jeffery Hall, Arkansas agriculture consultant, formerly with the Arkansas Farm Bureau, is unsure if conferees have yet worked out “anything on payment limits, AGI and ‘actively engaged.’ Last Thursday, some discussions over those things were going on.”

There is a belief by key staffers, said Hall, that there will be a farm bill framework in place by Christmas. If that is the case, the farm bill details will be worked out after the holiday so a bill can be voted on shortly after the turn of the year.

What about reports that there’s a nutrition title deal that would be palatable at least to the Democrats?

“The problem remains the Republicans in the House,” says Hall. “I’m still hearing that the (food stamp) cuts won’t amount to even $10 billion. I still believe it will take the House Democrats to pass the farm bill.

“And it will take cooler heads to get Boehner to put the conference report back on the floor. If he’ll do that, it’ll be problematic for lawmakers like (Arkansas Rep.) Tom Cotton to vote against it considering his constituency. Then again, how will he square voting for it if SNAP cuts are only at $10 billion and he’s already made all these statements favoring much deeper cuts?”

Setting aside nutrition programs, regional differences in the commodity title still bedevil conferees.

"It seems the House and Senate leaders are pushing for their respective commodity programs -- with the exception of the few Southern senators who favor the House program," says Hall. "At the end of the day, I feel we'll have the House commodity programs in the conference report."

Whatever happens, says Tommy Young, a large grain producer from Tuckerman, Ark., “There is going to have to be something in the farm bill that gives us some sort of safety net. If I was to ask for one thing it would be a safety net for price more than one for production. That’s because in the Mid-South – at least in Arkansas – I suspect that 75 percent of the farmers are equipped in such a way where they can just about make a good crop even in drought.”

One thing backing Young up is the state average corn yield in 2012 was around 170 bushels. That was accomplished in the worst drought experienced in decades.

This year, Arkansas set another state average record yield at 180 bushels.

The reason, according to Young: Mid-South farmers have invested heavily in irrigation.

“In 1980, my father had three wells on his farm. Now, we’ve got 60-plus wells and we’re running nearly 30 center-pivots. We’ve made ourselves as drought-proof as possible.

“That means crop insurance for us, from the standpoint of production, means very little. Crop insurance for us, from the standpoint of protecting and having a floor on price, is extremely important.”

Hindering trade

In the past, producers have used direct payments as price support. Those won’t be back after this farm bill. But Young warns that Southern farmers must have something in place to protect positions and not leave themselves dangerously vulnerable to major price fluctuations.

Also, too few acknowledge that there is no guarantee input costs must come down when commodity prices dip.

“Our Midwestern counterparts look at the situation much differently, of course,” says Young. “They look to crop insurance as something that helps after years of drought. If they have a drought and normally turn their normal 200-bushels corn yield to a 70-bushel yield, they want protection.

“Here, the South is different. We can always make a crop but it won’t necessarily be profitable because the price may have declined to the point where it won’t allow it.”

What about the lack of a farm bill hindering 2014 preparations?

“It is important that we get a farm bill because it affects so many common, everyday things that most folks don’t think about,” says Young. “For example, with every second there isn’t a farm bill, foreign market development is like a can with a tight lid on it.”

A member of the U.S. Grains Council, Young says the organization has offices set up all over the world to promote sales. The needed funding – check-off dollars -- to run those offices is often matched through several U.S. government programs.

“Well, with no farm bill, all that has stopped. No one can do anything and we’re just forced to watch while other countries take sales out from under our noses. It takes years to develop these sales pipelines and deals and now they’re just sitting in limbo.

“Everyone knows when something like this lies dormant for a long time – it begins to disintegrate. The longer we delay the farm bill, the more these relationships and deals we’ve worked so hard to set up erode.

“Here’s another thing: I was at my local FSA office just a few days ago trying to certify my winter wheat. Do you realize they don’t even have the money to provide you with a file folder? They can’t provide those until a farm bill is established and their office budget is established.

It trickles down and has a real effect. The longer this goes on, the more we see that.” 

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