WOOSTER, Ohio — The U.S. House of Representatives voted Dec. 12 to extend the 2008 farm bill through January, after the bipartisan conference committee failed to come up with an end-of-year deal on a new bill.
The House broke for its holiday recess Dec. 13 and the Senate will do the same in a matter of days. The bill has been sent to the Senate, but it is unclear what, if any action, may be taken.
The extension suspends “permanent price supports,” meaning there will be no doubling of the milk price in stores.
Washington media reports say that Sen. Debbie Stabenow, D-Mich., who is chairwoman of the Senate Ag Committee, is opposed to another extension. Instead, work is expected to continue on the conference, when Congress returns in January.
What’s happening.
Meanwhile, farm policy experts are taking their best shots at understanding what’s going on, and how it might all end.
At the annual Ohio State University Ag Outlook and Policy Meeting Dec. 12 in Wooster, Ohio, OSU farm policy expert Carl Zulauf said there are three likely outcomes: The conference committee agrees on a new law; the committee fails to agree and the 2008 farm bill is extended one to two years, most likely with cuts to direct payments; or, the most unlikely outcome, the committee fails to agree and there is no farm bill, commodity programs would end and permanent law would be repealed.
Zulauf has traveled the state talking about the farm bill — mostly making sure people understand the debate and how the process works.
“There’s a lot of things that people misunderstand about conference,” he said.
The basics
First, the conference is not bound by previous bills passed by the House or Senate. The conferees can shape new policy, but it must pass by a majority of the Senate and a majority of House members.
While the process has been cumbersome, Zulauf said progress is being made. He expects an agreement mid-January.
Battle points
The holdup remains the battle over food stamp funding, and funding for farm safety nets.
The nutrition titles, which include food stamps, account for between 70 and 80 percent of the bill. The Senate seeks to cut about $4 billion in the new bill, while the House is going for nearly $40 billion.
It’s hard to say what amount of cuts the conference will agree upon, but Zulauf said “it’s got to be much closer to the Senate side than to the House side.”
The Senate and President Barack Obama have both said they will oppose major cuts to food stamps.
But an equally important issue, and possibly more so, is the battle over farm safety nets.
“I see the crop safety net as the real bottleneck to getting a bill done,” Zulauf said.
While the current bills seek to end direct payments, they would continue subsidies for crop insurance, and other programs that protect against loss.
Safety nets
The question of deciding what to protect, and how much, is philosophical, Zulauf said, and is hard to find compromise.
“Should the market decide, ultimately, and only what is produced, or do we have a responsibility to help crops that are seeing their market shares dramatically decline,” he asked. “These are deeply philosophical questions. And the problem is with philosophical questions is somebody wins and somebody loses. There is no middle ground and it is very hard to get creative compromises on philosophical questions.”
Currently, about 62 percent of farmers’ crop insurance premiums are subsidized.
Zulauf advised farmers to be sure they have enough coverage going forward, and to keep up with any changes to the program.
He said the last five years, crop insurance has generally covered the cost of production — but historically — that has not been the case.
Even at 85 percent coverage, he said farmers may not be insuring enough to cover their costs.
“Be very careful about assuming insurance will cover your cost of production,” he said.
Zulauf said most farmers have already made their planting decisions for next year. He said the probability of an extension, as opposed to a new bill, will become greater if the debate continues past mid-January.
