What others are saying
Dairy industry already paying the price for Farm Bill paralysis
Andrew Novakovic is a professor in Cornell’s College of Agriculture and Life Science’s Dyson School of Applied Economics and Management. Novakovic’s research focuses on the economics of dairy markets.
“Congress has yet to pass legislation to replace agricultural and food policies that are set to expire on Oct. 1. While this creates uncertainty for U.S. farmers in general, dairy farmers face an additional and severe handicap.
“On Sept. 1, provisions for the Milk Income Loss Contract program reverted to pre-2008 levels that render the program meaningless. Under the MILC program, dairy farmers have been receiving substantial countercyclical subsidies to help them offset the large imbalance between the price of milk they receive and the prices they pay for corn and soybean meal that they use to feed their cows. MILC payments began in February 2012 and would continue through November or December based on currently expected prices, if the 2008 provisions stayed in effect. However, under current law, the last payment will be made for milk produced in August. The exact amount of the payment varies each month and across farms, but for many of the nation's farms of average size or smaller, the payment amounts to almost 10 percent of their monthly milk check and can mean the difference between losing money and breaking close to even.
“If Congress fails to pass new agricultural and food policy legislation by the October deadline, America's growers of corn and other crops will continue to be covered by the crop insurance they purchase last Spring – but dairy farmers and other livestock farmers have no respite from drought conditions that are resulting in heat stress for many animals, poor pastures and expensive feeds.”
Temporary extension could damage ag research for years to come
Thomas Björkman is a horticultural professor and researcher at Cornell’s College of Agriculture and Life Sciences who is developing Earth-friendly management techniques to solve contemporary limitations in vegetable production.
“A dangerous funding gap is created if there is only an extension of the Farm Bill, rather than a new one.
“Several important mandatory research programs that are in the Farm Bill will receive no funds at all. Scientists working on subjects critical to the health of the nation and the rural economy, such as specialty crops and organic production would have their primary funding programs suspended.
“They may have to redirect their research efforts and we would lose essential talent.”
Senate’s food aid provisions must survive or lives will be lost
Christopher Barrett is a Cornell professor in the Dyson School of Applied Economics and Management who specializes in global agriculture and poverty and international development.
“Last year, Ethiopian farmers were devastated by a drought that struck the Horn of Africa. A quick, flexible and remarkably efficient food aid response helped these people pull through what could have been a deadly disaster. Much of that food aid was a gift from the American people. A large share of it was purchased nearby, in Africa, enabling faster and cheaper delivery.
“But the legislative authorization for the main U.S. food aid programs that make this assistance possible will expires at the end of this month.
“The Senate’s version of a new Farm Bill would impose helpful reporting requirements on wasteful food aid monetization that the U.S. Government Accountability Office estimates cost taxpayers hundreds of millions of dollars annually and too frequently disrupts commercial food markets in poor countries. More importantly, the Senate bill permanently authorizes local and regional procurement of food aid of the sort that has proved so successful in Ethiopia and other countries. Local and regional food aid purchases comprised only 11 percent of global food aid in 1999, but as every other major donor country began adopting this practice and the 2008 Farm Bill authorized a highly successful pilot program, that share jumped to 67 percent by 2010. Far more often than not, buying locally saves time, money and lives.
“By contrast, the Farm Bill passed by the House would end authorization to buy U.S. food aid commodities outside the U.S. and would promote monetization, both major steps backward.
“In the face of increasing numbers of people affected by disasters each year, rising food prices due to severe drought in the Midwest, and necessary budget tightening, the opportunity to reduce wasteful spending and improve foreign disaster response is a ‘win-win.’ Congress needs to pass a Farm Bill based on the Senate’s far superior version. Otherwise, families all over the world will suffer unnecessarily when the next disaster inevitably strikes.”
House plans for target-price programs ‘a large step backward’
Joshua Woodard is a Cornell professor in the Dyson School of Applied Economics and Management who specializes in agribusiness, finance, risk management and crop insurance.
“While seemingly similar, the House and Senate versions have some stark differences.
“The Senate bill is laudable in that it relies heavily on risk management, market-oriented programs, such as Agriculture Risk Coverage. However, the centerpiece of the House bill takes a large step backward by featuring market-distorting target-price programs which are projected to disproportionately benefit Southern states.
“Rather than imposing unfair cuts on any one group, the Senate’s proposal makes big strides toward restoring equity in payments across crops and also brings the overall level of payments down substantially for all crops. The Congressional Budget Office estimates that will save taxpayers billions of dollars in the coming years.”
From Heritage Action of America
Very few farmers, ranchers, orchardists and food stamp recipients will notice when the current farm and food stamp bill expires on Sunday. Despite the outlandish claims made by some for political reasons, the law’s expiration is largely inconsequential.
“The short answer: the sky won’t fall. The longer and more nuanced answer: Heck no, the sky won’t fall. To put pressure on the House Republican leadership, some farm lobby groups are arguing that the agricultural sector will face severe problems if a new farm bill is not in place by Sept. 30, two weeks from now. The truth is that very little would happen, either in agricultural commodity markets or on the farm, at least over the next eight months.” (American Boondoggle, “Will the sky fall? What happens if there is no new farm bill by Oct. 1, 2012,” Blog, 9/14/12)
“’The good news is, despite desperate calls from farmers and ranchers around the country, few in agriculture will immediately feel the consequences of Congress’s gridlock. They sky does not fall,’ says Mary Kate Thatcher, the director of congressional affairs for the American Farm Bureau. ‘The food stamp program, crop insurance program, and most conservation programs are all extended. When it really starts hitting you is next spring.’” (U.S. News, “No Farm Bill? No Problem, Unless You’re a Dairy Farmer,” Editorial, 9/18/12)
“Despite over-the-top rhetoric, this would not be the first time the Farm Bill has expired without a new policy in place. The previous five-year Farm Bill expired Sept. 30, 2007, was extended Dec. 26, 2007, and a new bill was signed into law after a series of short-term extensions. While not ideal, it was not disastrous. Our producers were able to rise above the politics.” (Journal Star, “Local View: Uninformed and Irresponsible Rhetoric on the Farm Bill,” Editorial, 9/20/12)
It’s not just a hypothetical, either. This would be only the second time since 1973 the farm bill has been allowed to expire. In 2007, when the bill expired for 67 days, the rural community did not collapse, nor were farm-state lawmakers and lobbyists particularly concerned.
“The loss probably wouldn’t be forever (sub. req’d). Eventually, a farm bill will be passed, and specialty crop producers do have Senate allies… Congress often misses deadlines, with muted real-world impact… The farm bill due in 1995, for instance, wasn’t signed into law until April 1996. The delay ‘does little harm other than leave farmers uncertain about the size of the payments they might receive,’ the Congressional Research Service noted in a new report.” (Fresno Bee, “Farm Bill Bogs Down in Senate: State Growers’ Hopes Fade as Legislation for Funding of Specialty Crops is Delayed,” 9/15/07)
“For commodity support programs, there was little reason to enact a farm bill before the end of calendar year 2007. In fact, past farm bills generally have been enacted late in the year, after the end of the fiscal year… What was expected to be a1995 farm bill was not enacted until April 4, 1996… Even in that case, payments were made on the 1995 crops and farmers went ahead with planting operations for their 1996 crops.
Policy officials and the agriculture community expected a 2007 farm bill to be enacted before the end of calendar year 2007. However, lack of new commodity support legislation before harvest in 2008 did little harm other than leaving producers of “covered commodities” uncertain about the size of payments they might receive.” (CRS Report for Congress: Possible Expiration (or Extension) of the 2002 Farm Bill)
“The best solution to the pending expiration of the farm bill would be to let it expire and pop champagne corks — a national version of a mortgage-burning party.” (Law Vegas Review-Journal, “Temporary Reprieve from Farm Bill,” 11/18/07)
The Washington Post editorial board put it best: No farm bill at all might be better than a bad bill.
“But for those who think, reasonably, that agriculture needs a bigger haircut than the Senate farm bill’s $23 billion in savings over 10 years, the delay is not cause for concern at all. Operation of critical programs, including food stamps, won’t be affected for the time being. Meanwhile, Congress can think some more before approving legislation whose 10-year price tag approaches $1 trillion — and whose key innovation is to replace existing crop subsidies with a costly new crop “insurance” program that creates all sorts of perverse incentives for farmers.” (Washington Post, “No farm bill at all might be better than a bad bill,” Editorial, 9/23/12)
