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on January 3, 2008

House action wins support as farm bill moves to Senate

Farm bill gains momentum as it passes in the House and heads to the Senate.

The U.S. House of Representatives passed its version of the Farm, Nutrition and Bioenergy Act of 2007 (HR 2419) at the end of July on a vote of 231-191, providing federal funding through fiscal year 2012.

The measure, which continues many of the basic policies of the current farm bill passed five years ago, will extend and enhance conservation programs, including the Conservation Reserve Program (CRP) among others, and allocate funding for renewable energy research, development and production.

Most of the major farm groups support the House farm bill, including the American Farm Bureau Federation and the National Farmers Union, organizations which often don't see eye-to-eye on issues.

Senate response

Expiration of the farm bill neared as this issue of Feed Management went to press. Speaking to Feed Management at the end of September, Dave Ladd, manager of government affairs at AgriBank, FCB in St. Paul, Minn., said that deadline made it increasingly likely that Congress would be faced with approving a temporary extension of the existing law before the clock runs out on the current bill.  "However, this deadline is complicated by a number of factors, including the energy bill, a slew of fiscal year 2008 appropriations bills and the scheduled adjournment of the Senate on October 6th.  While it is true that the House is slated to be in session until October 26th, any progress on a new farm bill is contingent on the Senate moving forward in a timely fashion," Ladd explains.

And he says that's easier said than done.  "The situation has been complicated by the differences between two key senators Senate Agriculture Committee Chairman Tom Harkin (D Iowa) and Senate Budget Committee Chairman Kent Conrad (D N.D.).  Each has different views as to how the bill should be structured, with Senator Harkin seeking an overhaul of commodity payments, increases in funding for nutrition and conservation programs, and a disaster relief plan that varies from what many of his colleagues might be willing to consider.

By way of contrast, Senator Conrad hopes to retain farm subsidies and create a permanent disaster fund and he has enticed a handful of Southern lawmakers, including Senators Blanche Lincoln (D-Ark.) and Senate Agriculture Committee Ranking Republican, Saxby Chambliss (R Ga.), towards his way of thinking.  With cotton and rice producers, who face higher production costs, benefiting from the current commodity structure and livestock producers suffering losses due to natural disasters, as well as wheat growers seeking increases, the political calculus is clear," Ladd says.

Disaster program proposal

He notes that Senator Conrad has been working with Senate Finance Committee Chairman Max Baucus (D Mont.) to find sufficient offsets to fund a permanent disaster program for farmers who lose crops to fire, drought and flood while at the same time maintaining the current mix of subsidies. Some estimates put the cost of a disaster program at $5 billion to $6 billion over five years.  "This causes concern amongst some stakeholders who say that such a substantial amount of money going toward disaster relief will draw resources away from conservation and nutrition programs," Ladd adds. "Clearly, funding issues continue to cloud the debate."

Ladd says that the Senate and House Agriculture committees have been working under tight budget allocations thereby forcing the leadership to be creative in how they find new money to fund ‘pet initiatives' and satisfy the varied priorities of their colleagues.  According to Congressional Quarterly, Chairman Harkin has floated the idea of writing a bill that may last six or seven years, compared with the five-year bill passed earlier by the House.  This would allow Senator Harkin to spread out the cost over a longer timeframe, including an additional $6 billion in funding for the aforementioned conservation and nutrition programs.  With a host of new stakeholders in the game (e.g. specialty crop growers), members are trying to fit the new five year farm bill under a $286 billion cap. "Clearly, delicate balancing acts and creative thinking have become the order of the day," sums up Ladd.

Not only are members hunting for new revenue streams, they are also fishing for votes that will allow them to guide their competing proposals through the Senate.  It is critical that supporters not only advance a bill that can gain a solid majority in the committee, but also a "super majority" once the bill moves to the Senate floor, Ladd notes.

Counter-cyclical program

Ladd says another area in which the Senate farm bill is likely to differ from the House version is the structure surrounding a revenue-based countercyclical program that would be tied to a farmer's revenue.  Although four primary revenue proposals have been advanced thus far, he says there is no clear indication as to what path the final bill will take. 

"While each of these approaches has advantages and disadvantages, it remains to be seen which will have the most legs to make it across the finish line.  Keen observers, however, are betting that some form of revenue-based provision will be included in the farm bill that eventually reaches the President's desk."

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