Farm bill faces pivotal week

Lawmakers representing rural areas are making last-ditch efforts to negotiate a House-Senate farm bill compromise, hoping they can get a five-year farm bill attached to a fiscal cliff deal.

“Of course, the next week is pivotal,” one congressional aide said.

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Most U.S. farm support programs expired on Oct. 1 and livestock programs lapsed a year earlier. The Senate passed a five-year farm bill, as did the House Agriculture Committee.

House leaders have said they plan to “deal” with the farm bill in the lame-duck session but have not tipped their hand as to how.

The most likely path for the farm bill would be to use it as part of a deal to avert the more than $500 billion in tax increases and spending cuts known as the fiscal cliff. The Senate farm bill cuts the deficit by $23 billion and the House bill cuts it by $35 billion, over ten years.

To take a ride on the fiscal cliff vehicle, however, House and Senate agriculture committees will have to work out their differences.

Those differences fall into two broad categories: food stamps and commodity subsidies.

The House farm bill cuts food stamps by $16 billion and the Senate bill trims $4 billion. The differences on these are being sidelined for now as both sides try to resolve the politically easier issue of commodities.

Both bills do away with so-called “direct payments” which are made to farmers regardless of whether they farm, based on historic production.

The Senate bill also did away with marketing loans and countercyclical payments, which are based on setting target prices for the market. The Senate then created a new “shallow-loss” program of revenue insurance for farmers, based on farm-level and county-level production figures.

The House also created a more limited shallow-loss revenue program, based on county level figures, but it kept target prices, which are used by southern commodity farmers like those growing rice and peanuts.

On Monday, Senate Agriculture Committee Chairman Debbie Stabenow (D-Mich.) and ranking member Pat Roberts (R-Kan.) floated to the House committee a proposal for continuing target prices. The Senate would set lower prices for rice, peanuts and wheat than the House had, sources said.

That proposal was not accepted by the House, however, sources said.

“At this point the Senate has extended a proposal to the House that meets the criteria they set,” one aide said. The aide said that the proposal ensures that northern commodities like corn and soybeans are not favored unfairly compare to rice and peanuts.

Growers of these products say revenue insurance does not work for them.

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Supporters of the farm bill hope that the dwindling time left in the lame-duck session causes both sides to compromise, as has been the case for past farm bills.

“Clock is ticking. We don’t have the much time left,” one source said.

Once the commodity title is solved, lobbyists have hopes that both sides can quickly find a food stamp compromise. Stabenow is open to more savings from “efficiencies” she has told The Hill.

“I believe when Reid and Boehner give them a number between $4 billion to $16 billion, they will figure it out,” one lobbyist said, referring to Senate Majority Leader Harry Reid (D-Nev.) and Speaker John Boehner (R-Ohio).

If the farm bill does not attach to a fiscal cliff deal, supporters are worried that the deal will specify a much larger cut to commodity programs for deficit reduction and then force committees to fight it out next year.

“We’d have to start the farm bill over with a huge gash in the middle of it,” one source said.

If a five-year bill does not come together, House leaders may once again try to pass a simple extension of the last farm bill or extend dairy and livestock programs which are seen as especially needed. Most farmers do not truly need the other commodity programs until the spring planting season. Stabenow has vowed to fight a limited extension tooth and nail, however.