STONEVILLE, Miss. – Delta farm leaders who thought they had a hard row to hoe when they helped pass the 2002 farm bill may not have seen anything yet, says Mark Keenum. Passing a 2007 farm bill – with safety net provisions – could be an even bigger challenge, he says.
That’s because several irresistible objects are set to converge during the months ahead when Sen. Thad Cochran, R-Miss., Keenum’s boss, and other farm state lawmakers will be sitting down to try to devise a new farm law.
“The President has already said he’s going to put forth a plan to reduce our deficit by one-half over the next five years,” says Keenum. “When you look at how to deal with reducing the deficit, there are only two ways to do that: either you raise taxes or you cut spending.
“I don’t see President Bush recommending any tax increases and I don’t see this new, even more conservative Congress proposing more taxes, either. As a result, we will be dealing with some rather severe spending cuts.”
Keenum, former agricultural aide and now chief of staff for Sen. Cochran, said the current Congress got a taste of those cuts when it passed the omnibus spending bill for fiscal year 2005 in a lame-duck session in late November.
“One of the things our members are proud of this year is that they were able to reduce the rate of increase in government spending,” Keenum told members of the Delta Council’s board of directors at their mid-year meeting at the new Charles W. Capps Jr. Entrepreneurial Center at Stoneville, Miss.
“We’re going to have increases in spending because our government is so dynamic and population is growing every year. But, in this bill we passed Saturday night (Nov. 20), non-defense government spending only increased by a little over 1 percent. That’s the lowest rate of increase in several decades.”
Keenum said Senate leaders had to put more money into the omnibus bill, which rolled nine appropriations bill into one measure, to get members to vote for it. But House leaders balked at the increases when the bill went to a House-Senate conference committee.
“What we had to do was an across-the-board cut of 0.75 percent for all non-defense, non-national security-type spending,” he said. “This may give us a sense of the lay of the land as we go into next year.”
When the president submits his fiscal year 2006 budget shortly after his inauguration on Jan. 20, Keenum says he believes it’s more likely to be a five-year plan than for just one year.
That could mean Congress will be required to pass a budget reconciliation act similar to those in 1990 and 1996 when farm state lawmakers had to find savings in farm programs to meet spending targets spelled out in the law.
Following passage of the 1990 budget reconciliation act, agriculture made its contribution to reduced spending through the triple base concept. That is, by reducing the number of base acres farmers received program payments on to 85 percent.
In 1996, agriculture responded to another budget reconciliation act with the freedom to farm bill, which was designed to phase out farm program payments by 2002. As most farmers know, Congress changed its mind in 2002, extending the Agricultural Market Transition Act or AMTA payments for another five years and adding counter-cyclical payments to help growers weather periods of low prices.
Keenum said farm organization leaders are becoming concerned about the possibility of another budget reconciliation act in 2005 for two reasons.
“One is that reopening the farm bill in mid-stream is not good for anybody,” he noted. “It’s not good for farmers, it’s not good for people who provide financing to farmers, or for people who provide inputs.
“Second of all is that we are in the process of going through major trade negotiations with other countries in the Doha Round. These are negotiations in the WTO that are aimed at promoting fairer trade.”
WTO officials have scheduled a ministerial meeting in Hong Kong in December 2005 to try to wrap up the negotiations so that it can be submitted to the governments of other nations and to the U.S. Congress. The administration hopes to have it ratified by 2007.
“That just happens to be the year that the fast track authority legislation that allows the president to submit trade agreements to the Senate for an up or down vote expires,” he said. “It’s also the last year of the current farm bill. So a lot of things are pointing toward 2007.”
Ag leaders who work with Congress on farm legislation are becoming justifiably concerned about this convergence of events, says Keenum.
“Perhaps the best analogy is that our trade negotiators are sitting at a poker table with a stack of chips,” he said. “Other countries all have their stack of chips, and we’re bargaining to try to work out a fair agreement.”
U.S. negotiators have their “three pillars of a new trade agreement” they’re working on that include: 1) increased market access, 2) the elimination of export subsidies and 3) reduced domestic subsidies, he said.
“But if between now and when we strike an agreement our negotiators have some of their bargaining chips removed, because we’re taking away supports to our farmers, they won’t have as strong a ground to negotiate on,” said Keenum.
“I’m not saying that this is going to happen, but these are the sort of things that are being discussed at high levels and that you need to be thinking about, questions like what if Congress has to modify the farm bill to capture savings to contribute to reducing the deficit.”
Fortunately, farmers in the Delta and elsewhere in the Sun Belt will have some strong leaders representing them in Congress,” Keenum notes.
“Obviously, we hope that Sen. Cochran will be confirmed as the new chairman of the Appropriations Committee when the Senate convenes in January. Any changes in the farm bill, meanwhile, will be referred to the Agriculture Committee where Sen. Saxby Chambliss of Georgia is expected to become the chairman.
“Sen. Pat Roberts of Kansas is next in line to succeed Sen. Cochran as Agriculture Committee chairman, but Sen. Roberts is expected to ask to retain his chairmanship of the Senate Intelligence Committee. We have good relationships with both, but we have a really great relationship with Sen. Chambliss.”