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

After weeks of delay waiting for the budget situation to get clarified, the Senate Committeee on Agiculture, Nutrition, and Forestry two days ago approved a farm bill proposal put forward by Committee Chairman Tom Harkin of Iowa, Committee Ranking Republican Saxby Chambliss of Georgia, and Budget Committee Chairman Kent Conrad of North Dakota. Their proposal survived the committee mark-up process relatively unscathed, and now the bill heads to the Senate floor. Majority Leader Reid on Friday said that he would provide floor time for the farm bill debate during the week of November 5.

COMMITTEE ACTION: Earlier this month, the Senate Committee on Finance took action to provide funding for at least some farm bill programs, giving Agriculture Chairman Harkin enough flexibility to put together a farm bill proposal with Chambliss and Conrad that could attract enough votes to clear committee. That proposal is briefly summarized in my last blog posting of October 19.

The Harkin-Chambliss-Conrad plan sailed through committee mark-up this week with just nine amendments made to it; and only one amendment, offered by Senator Pat Roberts of Kansas, substantially changed the legislation. The Roberts amendment addressed what, for now, is the most controversial part of the bill--a new counter-cyclical payment option for grains, oilseeds, and cotton producers referred to as the Average Crop Revenue (ACR) program. The amendment restricts the scope of the new ACR program in a way that on the one hand will please the crop insurance industry, which is fearful that ACR program might cut substantially into its multi-peril crop insurance business (ACR and crop insurance aim to do essentially the same thing--protect farmers from unforeseen revenue losses), but on the other hand will distress supporters of ACR including the corn growers because the amendment makes ACR less attractive to farmers.

The battle over ACR and, more generally, revenue-based counter-cyclical payments will continue as the bill advances through Congress; and it is difficult to predict at this point what the final bill will look like in this regard. It is very likely, though, that some revenue-based program will be in the bill and, along with payment limitation reform, increased benefits for fruit and vegetable growers, the alternative energy package, among others, will be what distinguishes this farm bill from current law.

Further, although most of the farm bill debate so far has focused on farm price and income protection programs, it is worth keeping in mind that the farm bill likely will end up major changes in other food regulatory laws not traditionally considered as part of the farm bill but that have as much or more direct impact on consumers. The House started it by including new provisions requiring country-of-origin labeling of meat, and the Senate committee-reported bill adds to that new authority for state meat inspection programs and a prohibition on packer ownership of livestock.

FLOOR DEBATE: The heat during the Senate floor debate won't be generated by whether the bill passes--that is almost a given--but by one or more proposed amendments. Look for extended and passionate debate over amendments to tighten up payment limitations, the Lugar-Lautenberg substitute farm bill that would make more radical reforms to farm programs than the committee bill, and a Chambliss proposal to extend the authority of the cooperative Farm Credit System to finance alternative energy projects and rural housing (which the commercial banking industry is adamantly opposed to).

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FARM BILL UPDATE: Senate Ag. Committee Completes Its Work, Floor Debate Scheduled for Week of Nov. 5

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