Congress is back next week from their Easter recess. The U.S. House and Senate are scheduled to be in session through April 27. Congress will be off the week of April 30 and return for a two-week session from May 7 – 18. All total for the month of May the House will be in session 10 days and the Senate will be in session 15 days.
U.S. Senate Agriculture Committee staff continued meetings this week with instructions from their bosses to be prepared for mark-up of the 2012 Farm Bill in committee on April 25. We understand that US Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) may have secured a commitment from Senate leadership for floor time for debate of the Farm Bill sometime in May.
Farmers to Lose $5 Billion
However, major differences remain among the varying farm and commodity groups over how to spend reduced funding levels in Title I (Commodities). Title I spending is almost certain to lose direct payments to farmers that amount to $5 billion annually and are paid to farmers based on their production history.
The U.S. Department of Agriculture’s federal crop insurance program is the one program that has received support from most farm groups. But recently even this program has been receiving increased scrutiny because of the level of government subsidies provided to pay for part of a farmer’s crop insurance premiums. Those subsidies average about 62 percent of the total premiums paid in 2011 according to a report released March 13, 2012 by the U.S. Government Accountability Office (GAO).
Record Breaking Farm Incomes
In 2011, the crop insurance program provided about $113 billion in insurance coverage for about 264 million acres of farmland, for over 1.1 million policies. The Congressional Budget Office estimates that, for fiscal years 2013 through 2022, the federal government’s crop insurance costs will average $8.9 billion per year. This subsidy is occurring amidst some of the highest net farm income on record in the U.S. The U.S. Department of Agriculture (USDA) reported that 2011 net farm income was a record $98.1 billion. For 2012, USDA estimates that net farm income will decline to $91.7 billion—still the second highest level on record.
According to the USDA Risk Management Agency, federal crop insurance indemnities will be $10.5 billion for all eligible crops in 2011. This closely matches the amount of premiums paid by producers, nearly $12 billion.
Extending the Deadline?
If the U.S. Senate is able to pass a Farm Bill in May, pressure will intensify in the U.S. House to get a Farm Bill completed this year despite some already forecasting it is too late to complete a bill by September 30, when the current farm legislation expires. House Agriculture Committee Chairman Frank Lucas (R-OK) has been quoted in agriculture publications that there is a “strong chance” that the current 2008 Farm Bill may have to be extended into 2013. Chairman Lucas cited that we may be too late to have a farm bill in place for the fall planting season and reminded everyone that both the 2002 and 2008 farm bills both passed after a one year extension.
- From June 1, there remains 37 legislative days on the US House (Majority Leader) legislative calendar until September 30.
- To break this down further, there are 13 legislative days in both June and July,
- three in August and
- 8 legislative days in September.
- That means Chairman Lucas must complete a Farm Bill by July 24 to leave open a three week (legislative days) window for Conference Committee, final passage in both chambers and signed by the President.
It is difficult to project whether or not Congress can adopt a farm bill in this time frame. There are substantial policy changes ahead including loss of direct payments, the number of conservation programs being cut in half and crop and revenue insurance programs. There will also be differences in the spending levels among the farm programs when the Farm Bill reaches a House and Senate Conference Committee. The U.S. Senate will likely adopt a Farm Bill using the $23 billion target in program reductions that was to be incorporated in the now failed budget deficit reduction package last fall.
Cut $8.2 Billion!
The U.S. House Budget Committee has instructed the Agriculture Committee to find $8.2 billion in savings this fiscal year (2012) and FY 2013 and total savings of $33.2 billion by 2022.
If a Farm Bill reaches Conference Committee there may be significant differences to be worked out. But with all the work that has already gone into drafting farm policy provisions and achieving $23 billion in reductions last fall, it shouldn’t present too difficult a challenge for lawmakers.
Cansler Consulting & The 2012 Farm Bill
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Having two decades of experience working closely with congressional leaders on key Committees and regulatory officials, Tim Cansler, Founder and Chief Strategist of Cansler Consulting, continues to successfully achieve legislative and policy initiatives vital to client interests. Our successful strategies have consistently led to federal budget authorization and appropriations sought by clients including leading associations and Fortune 200 companies. Cansler Consulting has also been successful in working with regulatory officials to ensure programs beneficial to clients’ interests are implemented as intended.
If your company needs assistance in navigating the intricacies of the 2012 Farm Bill, or representation, please contact us today at (202) 714-2822 for a consultation today to see how we can help you.