2012 Farm Bill in Senate; Ag Approps In House

FarmBill moving forward in Summer of 2012This week the U.S. Senate is scheduled to take up S. 3240, the Agriculture Reform, Food and Jobs Act of 2012 (commonly known as the 2012 Farm Bill).  The Farm Bill passed out of the Senate Agriculture Committee on April 26 with a bipartisan vote of 16–5.  Multiple and varying amendments are expected during floor consideration of the Farm Bill and debate could last up to three weeks.  The measure would cut deficits by $23 billion, a smaller amount than both the Obama administration and House Republicans are supporting.

What’s Impacted Now…

S. 3240 would:

  • Eliminate direct payments to farmers;
  • Farmers will no longer be paid based on historic base acres;
  • Keep marketing loan rates for major commodities (corn, soybeans, wheat, rice, pulse crops) the same as for the 2012 crop year, cotton loan rates may be lowered;
  • Provide farmers support for a drop in price or yields through the Agriculture Risk Coverage (ARC) program; a multiple-year, shallow loss program to complement crop insurance.  A farmer makes a 1-time, irrevocable decision to elect a county ARC if the county has sufficient data or an individual farm ARC. Coverage is for losses between 11% and 21% of the ARC benchmark value. Benchmark revenue for the county or individual farm is calculated using an Olympic average (removes low and high values) for the 5 most recent crop years of (1) U.S. price for the crop marketing year and (2) either yield per planted acre for the county or yield per planted acre for the farm in a county. Limit on payment per payment entity each year is $50,000 for all covered crops (spouses can be a payment entity). An adjusted gross income limitation is established at $750,000.  No payments can be received if an entity’s average adjusted gross income over the 3 preceding taxable years exceeds this amount;
  • Establish the Stacked Income Protection Plan (STAX) for cotton;
  • Give farmers the ability to modify risk management coverage for their farm to provide better protection against risks beyond their control.  The crop insurance program is improved through expanded access to risk management tools. A new Supplemental Coverage Option (SCO) is added to allow individual insurance to be supplemented with county insurance to cover all or part of the individual insurance deductible;
  • Consolidate 23 conservation programs into 13;
  • Improve the accountability of the Supplemental Nutrition Assistance Program (SNAP) by increasing enforcement on retailers and recipients engaged in benefit trafficking, increasing requirements to prevent liquor and tobacco stores from becoming retailers, ending program benefits to lottery winners and college students who exploit the program, and tightens standards that have resulted in overpayment of benefits in the past; and
  • Support specialty crop industry priorities, including research, pest and disease mitigation and trade.

Southern Senators concerned over southern crop provisions

Debbie Stabenow (D-MI), Chairwoman of the U.S. Senate Agriculture Committee maintains she has a filibuster-proof 60 votes when the measure comes before the Senate. But, some southern senators have complained that crops grown in their region (cotton, rice and peanuts) are being treated inequitably in the Senate version of the farm bill. Some of those Senators have vowed to vote against the farm bill unless provisions covering southern crops are changed.

The Food and Agricultural Policy Research Institute (FAPRI) has issued a report that focused on some of the key provisions of the Farm Bill passed by the Senate Agriculture Committee.  To review the report click on:  Impacts of Selected Provisions of the ‘Agriculture Reform, Food and Jobs Act of 2012.

Agriculture & FDA 2013 Appropriations

In related news, on Wednesday, the U.S. House Subcommittee on Appropriations for Agriculture, Rural Development and Food and Drug Administration will mark-up the FY 2013 appropriations bill.

Earlier this year the US Department of Agriculture submitted its budget request to Congress with total outlays for FY 2013 estimated at $155 billion. Roughly 83 percent of outlays, about $128 billion, are associated with mandatory programs that provide services as required by law. The majority of these outlays include crop insurance, nutrition assistance programs, and farm commodity programs.  The remaining 17 percent of outlays, estimated at $27 billion, are associated with discretionary programs such as the Special Supplemental Nutrition Program for Women, Infants and Children (WIC); rural development loans and grants; research and education; soil and water conservation technical assistance; animal and plant health; management of national forests, wildland fire, and other Forest Service activities; and domestic and international marketing assistance.

Between 2010 and 2012, USDA’s operating budget was reduced by over 12 percent. The FY 2013 request for discretionary budget authority to fund programs and operating expenses is about $24 billion, roughly the same level as provided in 2012. Funding for mandatory programs is projected to increase in 2013 by almost $8 billion due primarily to a one-time shift in the timing of certain crop insurance costs mandated by the 2008 Farm Bill. In 2013, rising employment and household income are projected to reduce the need for nutrition assistance through the Supplemental Nutrition Assistance Program (SNAP) and lead to fewer program participants, even as SNAP serves a larger share of those eligible.

Cansler Consulting is an experienced lobbying firm in Food and Drug strategies, budgeting, agriculture, rural healthcare, and energy policies and through our Congressional relationships we can help you influence the policy makers on Capitol Hill. You can contact us at info@canslerconsulting.com or at (202) 220-3150.

Tim Cansler