Fear: Farm bill ripe target for Ryan ax

The negotiations over a five-year farm bill are entering a crucial week.

One of the leaders of the conference committee on the farm bill said lawmakers have reached the point in the process where there will need to be give-and-take to reach an agreement.

“We’ve done all the staff work. What needs to be done now is the tradeoffs that can only be done between members,” House Agriculture Committee Ranking Member Collin Peterson (D-Minn.) told Agri-Talk radio on Friday.

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Negotiators are seeking to get the farm bill wrapped up by Thanksgiving, according to Peterson. That would require them to reach an agreement next week, so that the Congressional Budget Office (CBO) could score the legislation before the conference committee meets again.

It is clear that the agriculture committee leaders are eager to get things going.

Peterson said he and the other leaders of the conference committee plan to hold closed-door talks next week in Washington despite the House being in recess.

The Minnesota Democrat and the other three leaders of the farm bill conference committee — House Chairman Frank Lucas (R-Okla.), Senate Chairwoman Debbie Stabenow (D-Mich.), and Senate Ranking Member Thad Cochran (R-Miss.) — could meet as soon as Monday night, though no firm decisions have been made.

Farm bill negotiators and agriculture lobbyists fear the separate budget conference committee will take control of the farm bill if they fail to reach a deal. The budget conference, led by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) is seeking to find a budget agreement by Dec. 13, and meets next on Nov. 13.

“The farm bill is too easy a target for them not to grab,” said one farm lobbyist.

Ryan has targeted the farm bill for savings in the past. He has called for some $20 billion more in farm subsidy cuts than are in the House-passed farm bill, and for some $90 billion more in cuts to the food stamps section, which would be achieved by block-granting the program to the states.

Peterson and Stabenow met with Agriculture Secretary Tom Vilsack and top White House officials on Thursday to discuss the role that the farm bill could play in the budget talks, since the legislation could cut between $24 billion and $53 billion from the deficit.

Peterson said the White House assured him that they are “not interested” in the budget committee writing the farm bill.

“It is much more likely we get done than the budget gets done. They have some big problems,” he added. “We might actually carry the budget rather than they carry us.”

But in order for the farm bill talks to succeed, the lawmakers will have to reach an agreement on how deeply to cut food stamps.

The House farm bill cuts $40 billion in food stamp funding on top of an $11 billion cut that went into effect automatically on Nov. 1. The Senate bill has $4.5 billion in additional cuts.

Conference committee members from both sides say that the best way to resolve the difference is to define policy goals first — such as deciding whether to preserve the connection between home heating eligibility and food stamp eligibility — and then let the CBO crunch the numbers.

Peterson said Stabenow has told him Senate Democrats will not accept “double digit” levels of food stamp cuts.

One lobbyist said that the $11 billion in automatic cuts could give both sides some accounting wiggle-room. Democrats could agree to $9 billion in new food stamp cuts and argue that the total rises to $20 billion when the automatic cuts are included, for instance.

The horse-trading will likely be easier on the farm subsidy portion of the bill. Peterson said all sides have agreed that the House version of new dairy subsidies, which limits production by farmers, should stay in the final bill.

Peterson told Agri-Talk that his job would be to tell Speaker John Boehner (R-Ohio), who is personally opposed to the Dairy Security Act provisions. At that point, Boehner could refuse to hold a vote on the bill.

“I don’t think he dares do that,” Peterson said. “But there is going to be a shootout at the O.K. Corral.”

Other outstanding issues include whether conservation measures should be tied to crop insurance, whether crop insurance subsidies should be means-tested as in the Senate bill, and the exact size of the loss that triggers payments under competing shallow-loss plans in the House and Senate. 

The Senate bill kicks in once a 12 percent revenue loss is realized, while the House program kicks in at 15 percent.

The hardest issue in commodities remains how to calculate payments under price-based subsidies and whether the House bill encourages overproduction.

Sources said this issue could hinge on a major report due out next Friday from the Agriculture Department.

The November World Agricultural Supply and Demand Estimates (WASDE) report is the first since September because the government shutdown eliminated the October report. 

The report could forecast price drops in major commodities and cause CBO to rescore key aspects of the House and Senate bills.

Substantially weaker prices could balloon the cost of the farm subsidies on the one hand, but could also motivate all sides to get a deal in place more quickly to protect farmers in the New Year.