Posted by: Phillip Fraas
June 27, 2007
Topic: REPORTS ON FARM BILL STATUS--First Half of 2007

Until last week, the only farm bill proposals on the table all called for some sort of change in the existing farm bill programs--from relatively minor changes to free up funds for new priorities (e.g. the House Agriculture Committee working draft) to major reforms that would dramatically alter the nature of the farm programs (e.g., the Kind-Lugar bill).

However, when the House Subcommittee on General Farm Commodities and Risk Management at its mark-up of the farm bill last Tuesday rejected both the Committee working draft and the Kind-Lugar proposal in favor of a straight extension of the current farm bill without any changes in the programs, the farm bill process got quite a shake up. Straight extension is now a viable third possibility for this year's farm bill.

Why would that be? There were several factors at work, some recently developed, that tipped things in favor of the votes for a straight extension at the subcommittee mark-up.

One factor that has been evident since hearings were held on the farm bill last year is that farmers by and large are relatively content with the current farm bill and are not pushing for change.

Add to that the recent collapse in the Doha Round trade negotiations. Those talks were aimed at getting agreement among World Trade Organization members for major changes in farm programs that affect international trade in food and fiber products. As talks progressed, Congress had to be prepared to change the U.S. farm programs and policies to implement what our trade negotiators might agree to. That is not the case any longer--at least for now. As this year has worn on, it became increasing clear that progress in the Doha Round might be unattainable any time soon. The failure last week of efforts among the U.S., the E.U., Brazil, and India to produce a break-through that might get Doha back on track sort of made it official. On top of that, the "fast track" trade negotiation authority needed to implement trade agreements expires on Saturday, with no immediate prospects that Congress will extend it soon.

Also, it appears that the opposition to reducing the so-called "payment limitation" (that is, the rules governing the award of farm program payments that cap the amount of payments any one person can receive) by farmers who would be adversely affected by proposed cuts had gotten some traction. USDA had proposed substantial "payment limitation" reforms, and the House Committee draft included less ambitious, but nonetheless, real cut-backs in payments. The straight extension approved by the House Subcommittee would keep current payment limitation rules intact.

What does a straight extension have going against it? USDA is opposed--the President has been described as "disappointed" in the subcommittee's action. Also, the public voices talking about the farm bill have argued for reform and more equitable allocation of farm program dollars. Third, by definition, a straight extension will use up all the money in the budget base line for the farm bill. That means no funds would be available to fund new initiatives, such as bioenergy projects, a permanent disaster assistance program, and programs and assistance for fruit and vegetable producers, nor to increase funding for existing priorities, such as soil and water conservation. Fourth, Congress is dominated by urban members, especially the House of Representatives. So, farm bills, even when they have everything going for them, can be tough to pass. A straight extension bill that thumbs its nose at calls for reform will be even tougher to pass.

What are its prospects? Even with those problems, a straight extension has a chance of prevailing. Regardless of what the administration and editorial boards of newspapers might say, they don't get to vote in Congress. And, it is not impossible that money might be found to pay for new initiatives that will attract supporters to the bill. Thus, at this point, it is reasonable to put a straight extension on the list of viable farm bill options.

But, the situation changes from week to week. Who know what chances a straight extension might have a month from now. Stay tuned.

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Farm Bill Update: Throw Out the Script, The Farm Bill Process Takes A Turn Toward A Straight Extension

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