Posted by: Phillip Fraas
March 16, 2007
Topic: REPORTS ON FARM BILL STATUS--First Half of 2007

Most of Congress's work in crafting a new farm bill will be done by Senate and House Agriculture Committees. These two committees get handed all the work because the farm bill issues tend to be highly technical requiring specialized expertise. The rest of Congress, to a large degree, depends on the 21 Senators and 46 representatives who sit on those committees to come up with farm programs that will best serve the national interests.

The two committees have gotten off to a good start this year in developing the new farm bill. They are holding hearings, it seems like, every other day; and they have already submitted their requests for budget authority to fund what goes into the bill. Further, the committee chairmen recently sketched out an ambitious work schedule for the year.

BUDGET AUTHORITY STILL UP IN THE AIR: As noted in my last blog posting, the shape of the new farm bill will be dictated, to a considerable degree, by how much spending authority Congress allocates to the Agriculture Committees. The committees have submitted their requests to the Budget Committees and now eagerly await their verdicts as what the Budget Committees recommend likely will be approved by the full membership of the two houses.

The House Budget Committee is expected to release its recommendations next week. On the Senate side, the Chairman of the Budget Committee, Kent Conrad (Dem.--N.D.) earlier this week recommended that a "budget-neutral" reserve fund of $15 billion be allocated to the Agriculture Committee for the farm bill in addition to the baseline amount (which is the amount farm programs would spend in the future if current programs are continued without change). "Budget neutral" means that the Agriculture Committee could tap the reserve to increase farm bill spending, but to do so would have to reduce spending in other areas so that there is no net increase in government spending overall.

While I haven't seen the Congressional Budget Office's five-year baseline for the farm bill, USDA calculates a baseline of about $61 billion a year for the next ten years. USDA, by the way, recommends an increase in spending of about $5 billion over the baseline for those ten years. And, today, The Washington Post, in an editorial, urged the Budget Committees not to approve any more than that $5 billion increase.

The budget surely will be a problem for the Agriculture Committees because the farm bill baseline simply is not big enough to accommodate all the programs recommended for inclusion in it. This is not a newly-minted problem peculiar to this year. Except in times of budget surplus, as in 2002, the Agriculture Committees have always had to fight tooth and nail for increases in farm spending. There is no surplus this year, so no one expects the Budget Committees to allocate substantial increases for the farm bill, or either house to waive budget points of order against farm bill spending in excess of the baseline.

FARM BILL SCHEDULE: Based on my discussions with people on Capitol Hill, it looks like the farm bill schedule will be as follows: Committee mark-up in June; floor debate and conference consideration in July; staff work drafting the conference report in August, and final passage in September.

If Congress adheres to those timelines, it will be the first time the farm bill will have been finished that early since 1977. For farm bills since, completion in late December has been the norm, and on occasion the debate has run over well into the following year.

The September deadline is important because farmers need to know what the price and income support rules are going to be well in advance of spring 2008 planting. Further, many other farm bill programs not tied to planting expire or need renewal by the end of this fiscal year, which is September 30. So, there is plenty of motivation for the chairmen of the two committees to meet their planned schedule.

DEVELOPING ISSUES: Increasingly, it looks as if the Agriculture Committees will not simply renew the existing the farm programs without change. As noted above, there are too many new players at the table whose needs must be accommodated with a budget that has no wiggle room for new programs. For example,

the Committees have to deal with the need to fund increased biofuel research and development;
a new permanent disaster assistance program could be considered;
the needs of fruit and vegetable growers are on the front burner; and
there are relatively new mandatory spending programs for rural development and research that seek additional funding.

Turning from budget issues, look too for an effort to be made to add a competition package to the farm bill to limit agribusiness consolidation.

Assuming committee mark-ups occur as scheduled in June, there will be intense jockeying among lobbyists in April and May to get their messages on the issues to the committees. In short, it looks like things will be busy from here on out.

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