As hearings and discussions resume on crafting the 2012 farm bill, the threat of $30 billion to $35 billion being chopped out of agricultural programs hangs over the negotiations, says Carlisle Clarke, legislative assistant to Sen. Thad Cochran, R-Miss., vice chairman of the Appropriations Committee and a member of the Agriculture Committee.
“Last fall, in the debt ceiling discussions, each congressional committee was charged with offering up a package of cuts for programs under their jurisdiction,” he said at the Mississippi Farm Bureau Federation’s annual commodity conference.
“The leadership of the House and Senate agriculture committees agreed on $23 billion in cuts. Sen. Cochran and other committee members didn’t get to offer as much input as they would have liked, and we more or less condensed a normal farm bill process into about six weeks to get these recommendations done.
“The Joint Select Committee on Deficit Reduction ultimately didn’t ultimately pass anything, but we still ended up with that $23 billion in proposed cuts hanging over our heads for the 2012 farm bill.”
Part of the agreement last August, Clarke says, required that if the committee didn’t achieve the targeted budget cuts that would then be passed by Congress, budget sequestration would occur in January 2013.
“This means we’d essentially have automatic cuts determined by the Office of Management and Budget, with no input whatever by congressional leaders. That could mean $30 billion to $35 billion could be taken out of agriculture.
“They had already said food stamps would not be included in those cuts, so that $30-$35 billion would have to come from ag programs. And the agriculture spending baseline will be updated in March, which would make commodity spending even smaller than actually proposed.
‘To put this in perspective, over the next 10 years the food stamp program is projected to cost upward of $800 billion; under current policy, commodity programs would cost only about $71 billion during the same period.”
Anytime there is comprehensive legislation like the farm bill that costs upward of $1 trillion every 10 years, Clarke says, “We’re going to hear a lot of reservations from the deficit hawks on one end and from the outright opponents on the other end who don’t believe this nation should be investing in farm programs at all.
“It frankly baffles me that there is a disconnect on Capitol Hill between farmers who actually produce food and the persons who consume the food. For whatever reason, people don’t seem to make the connection that investing in farm programs is an investment in food security and global food supply. Our job is to sell that message as we enter into the farm bill discussions.”
The current farm program expires at the end of September, Clarke notes, and if no new farm bill is passed or the current bill isn’t extended, “we would revert to the common statutes of 1949 — and I don’t think anyone would realistically consider that an option.”
Elections driving Washington
Heading into spring and summer, he says, “The elections will be driving all the decisions that are made in Washington. Agriculture Committee Chairwoman, Sen. Debbie Stabenow, R-Mich., is among those up for re-election this fall.
“Most feedback indicates we’ll start hearings on the 2012 farm bill sometime toward the end of February, and reports in the press and elsewhere are that Sen. Stabenow would like to have the legislation marked up by Memorial Day. I don’t know how realistic that is, considering all the other issues to be considered, including extension of the payroll tax cut and raising the debt ceiling again.”
There are differing opinions and philosophies on what farm policy should look like for the next five years, Clarke says. “There is a large group who are adamant that direct payments, countercyclical payments, and the ACRE program should be eliminated and that we should move to a comprehensive revenue package, while some feel that crop insurance is the answer for everyone.
“Sen. Cochran’s position is that we need to insure there is a viable, equitable option for all regions of the country and for all producers of all commodities. That’s our challenge going forward — to sell that message and hopefully get enough members on board from those who are not well informed about production agriculture.
“There are great numbers of people in this country who don’t know or care much about farming. As an example, I had a top Senate aide tell me that there were children starving in Africa because of the subsidies that American farmers get.”
In reality, Clarke says, “Last year, the amount of money spent on actual farm programs was $19 billion, while the amount of money spent on food consumption was upward of $1.3 trillion. It doesn’t take an economist to see that $19 billion doesn’t have much of an impact on the price of food, but if you take away that safety net, take away that protection for farmers against uncertainty heading into a crop year, it would not only undermine our domestic farm policy and production agriculture nationwide, it would undoubtedly have serious consequences on the price of food.”
This year will be a challenging one, Clarke says. “There is a possibility the current farm bill could get extended. There’s a good chance Republicans can re-take the Senate in this year’s elections — being in the majority would be advantageous in negotiations.
“Hopefully, in the coming weeks Chairwoman Stabenow will establish our calendar, and if we’re unable to pass a farm bill this year, we can hope to get an extension of the current farm bill so that next year we can come back and put together the best package possible.”
In a question-and-answer session, Clarke said for the 2012 crop year, “It will be business as usual for direct payments.”
Asked if the Systemic Risk Reduction Program (SRRP), which has been popular in the Midwest, might work for Mississippi producers, he said, “We do have some concerns with how SRRP is currently written.
“Those who support SRRP argue that having a target price program instead of some sort of price trigger would distort marketing decisions to farmers — that they would plant one commodity over another, based on the type of program instead of the market decision they would naturally make.
“Our farms here are more diversified than those in the Midwest; some things work better for them, some things work better for us. We’re going to try for equitable, viable solutions that work for everybody.”
There are a lot of factors driving the farm bill discussion, Clarke says, and “with Farm Bureau and other organizations reaching out to us to let us know your needs and concerns, it helps us to insure that a safety net is provided that will help you be successful for the life of the next farm bill.”
He noted that Mississippi agriculture had its “best year ever” in 2011, with production value of $7 billion. Nationwide, average farm income nationwide “saw the biggest jump ever from 2009 to 2010, around 28 percent. And we’re expanding into new markets overseas after Congress finally passed new free trade agreements.”
But offsetting those positive developments, Clarke says, “Farmers are having to spend more per acre than ever before — your expenses are the highest they’ve ever been.
That’s another of the many challenges we face as we look to the writing of the 2012 farm bill.”