Farm bill faces austere future

U.S. Rep. Collin Peterson
U.S. Rep. Collin Peterson, the top Democrat on the committee and the author of the last farm bill, said simply laying out a proposed set of cuts that fast will inflame every interest group involved in the delicate process of negotiating a bill.
MPR photo/Brett Neely

Farmers may face some uncertainty by harvest time as Congress grapples with rewriting the farm bill before it expires in September. On the table are big cuts in federal farm spending.

Over the past few months, the U.S. House and Senate Agriculture committees have been holding hearings about the future of farm policy.

At a recent field hearing in Arkansas, House Agriculture Committee Chairman Frank Lucas, an Oklahoma Republican, sounded optimistic.

"We don't have an easy road ahead of us but I'm confident that by working together we can craft a farm bill that continues to support the success story that is American agriculture," Lucas said.

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That road might be rougher than he's letting on, thanks to the House budget road map authored by U.S. Rep. Paul Ryan, R-Wisconsin, that was passed last month without any Democratic votes.

The House budget — which won't become law because the Democratic-controlled Senate doesn't plan to take it up — calls for deep cuts to agriculture and food stamp programs covered by the farm bill. It will have to be reconciled with any legislation the Senate passes this year, which likely would spend contain fewer cuts.

Under Ryan's budget, various farm programs including subsidies, crop insurance and conservation would face $33 billion dollars worth of budget cuts over the next decade. Food stamps and nutrition programs would face even larger reductions — $133 billion over a decade.

Lucas put out a statement recently that called the Ryan budget only a "suggestion" but the House Agriculture Committee is on the hook to announce its planned cuts by the end of April.

U.S. Rep. Collin Peterson, the top Democrat on the committee and the author of the last farm bill, said simply laying out a proposed set of cuts that fast will inflame every interest group involved in the delicate process of negotiating a bill.

"It's going to so poison the water by the time that's over with, because they're going to go after food stamps and whatever else they do, that I don't know if we're going to be able to get back to working," Peterson said.

But the Minnesota Farm Bureau recognizes that any farm bill will include lower spending, said its president, Kevin Paap.

"We know that we're in different economic times, it has to be fiscally responsible," he said.

Still, Paap said the Senate's bill, still in the drafting stage, would be best for farmers.

That bill will likely propose $23 billion in cuts based on a bipartisan agreement worked out last fall compared to the $33 billion worth of cuts House Republicans want.

Despite the looming fights over the top-line budget numbers, there are some clear areas of agreement that are guiding both the House and Senate committees.

First, direct payments, which amount to $5 billion dollars a year and go to farms irrespective of how much they plant or earn, are going away.

But instead of direct payments, there's likely to be more emphasis on federally-subsidized crop insurance.

U.S. Sen. Amy Klobuchar, a Democrat who sits on the Senate Agriculture Committee, said government still needs to play a role in protecting farmers.

"What the crop insurance does is it creates some safety net for our farmers who, by the way, have a very volatile situation," Klobuchar said.

Critics of farm subsidies say that federal payments for crop insurance are a huge giveaway to farmers.

"The premium subsidies we're providing to farmers to buy crop and revenue insurance are now more valuable to farmers than direct payments for all of the major crops except rice," said Scott Faber, a vice-president of the nonprofit Environmental Working Group.

One issue to watch will be how generous that safety net winds up being.

Some groups have called for an insurance program that protects even relatively minor losses. But Paap, of the Farm Bureau, said he's putting his support behind a program that only insures catastrophic losses.

"Not necessarily help every year but help in the years when it's needed the most," he said.

Another controversial policy that appears likely to continue in any new farm bill is the tariff on imported sugar.

That tariff makes foreign sugar more expensive than domestic alternatives, including those from sugar beets harvested in Minnesota.

Critics of the tariff say consumers spends billions more on sugar than they otherwise would because of the tariff.

Still, U.S. Rep. Tim Walz, another Agriculture committee member, said sugar tariff appears safe for now — in part because the government doesn't have to spend money on it.

"Cutting the sugar program doesn't reduce the deficit by a penny," said Walz, a Democrat.

Even if all of the stake-holders can agree on what a bill should look like, Peterson thinks 2012 won't be the year a farm bill gets written.

"My guess right now is we'll be doing the farm bill next year in the next Congress," Peterson said.

If the farm bill expires on September 30th, lawmakers will likely try to find some way to craft a short-term extension of its provisions - itself no easy task in this divided Congress.