September 20, 2012
There was a time when lawmakers would quake in their shoes at the thought of running afoul of the farm lobby. Members of Congress would eagerly curry favor with the politically potent farm belt, showering farmers with billions of dollars worth of commodity price support, crop insurance, dairy subsidies and drought relief.
But times have changed since Congress enacted the last major piece of farm legislation five years ago, including four consecutive years of trillion dollar deficits, runaway spending on food stamps, looming automatic spending cuts under sequestration and rising food costs that have improved the average farmer’s bottom line.
This all helps to explain why lawmakers are preparing to adjourn Friday and head home to campaign through the Nov. 6 election without passing a new five-year plan or doing anything to provide relief to farmers and ranchers who just staggered through one of the worst droughts of modern times. The drought hit 1,000 counties in 26 states and every consumer’s pocketbook. The Senate passed major bipartisan farm legislation back in June, but a companion version has been trapped in the GOP controlled House for months in a bitter feud between fiscal conservatives and farm state lawmakers.
“The tea party in the House blocked it,” Sen. Patrick Leahy of Vermont, a veteran Democratic member of the Agriculture Committee, complained on Wednesday.“If Democrats were doing that you’d have Fox News and Rush Limbaugh and everybody doing specials on how [badly] we were doing.”
Asked how Republicans from farm states would explain to their constituents why Congress was going home without passing a farm bill, Sen. John Thune, R-S.D., replied, “Obviously, we passed a bill in the Senate but we’ve got to have action in the House of Representatives before we can put something on the President’s desk. Unfortunately, what this has devolved into is a debate not so much about farm policy but rather about other food-assistance programs. Eighty percent of the farm bill’s costs now are in those areas, and that’s the big hold up in the House.”
It’s still possible lawmakers will pass new farm legislation or address the weather crisis in a post-election lame duck session. For now, the farm community will have to muddle through under existing law and accept their secondary status on Capitol Hill.
“I don’t think anything is going to happen this week . . . and nothing substantively will change between now and the end of the year in terms of how the existing [agricultural] laws apply,” said Mark Maslyn, executive director of public policy for the American Farm Bureau Federation. While farmers can get by for the next several months without any action by Congress and the White House, he added, “It just means more uncertainty for farmers in terms of making plans for next year for their operations.”
FARM STATES LOSE GROUND
Iowa, home to the nation’s first presidential caucuses, Nebraska, Indiana, Kansas, Wisconsin and other major agricultural and dairy states have long enjoyed outsized political influence in Washington – especially in election years. For decades, Congress has gone along with generous renewals of price supports, crop insurance and other programs for encouraging new farmers and sharply reducing the financial risk of others.
But as Washington and voters across the country became more concerned about the deficit and a national debt now in excess of $16 trillion, Republicans and Democrats alike began targeting overly generous price supports, ethanol subsidies and food stamps for cuts.
Last June, the Senate approved a bipartisan farm bill, 64 to 35, that would eliminate the $5 billion a year in direct payments to producers of corn, wheat, soybeans and other crops, an enormously costly and wasteful program that over the years showered farmers and land owners with subsidies, whether or not they actually grew the crops. The legislation would also streamline the Agriculture Department bureaucracy by consolidating 23 conservation programs into 13, and would crack down on fraud and abuse in the federal food stamp program, which accounts for a startling 80 percent of agriculture related spending.
Overall, the Senate-passed bill would reduce spending by $23 billion below what it would otherwise be under current law over the next ten years. Nonetheless, overall government farm spending would continue to grow – especially with a substantial beefing up of the crop insurance program – and would be 60 percent more in the coming decade than under the old law. Congress is trying to slow the rate of growth through cost cutting, including about $4.5 billion from the massive food stamp program.
THE HOUSE BILL--PLAN 'B'
But House GOP leaders refused to consider their own Agriculture Committee’s sweeping farm measure, and instead pushed through a short-term $383 million package of loans and grants for livestock producers and a limited number of farmers. Senate leaders declined to go along with that measure because they said it was too limited, a view shared by many farmers and their lobbyists.
House Speaker John Boehner, R-Ohio, lacks enough votes to pass a bill because Democrats are highly critical of the $16 billion in cuts to food stamps and other nutrition programs, in the House committee’s bill. And many conservative Republicans would like to see more cuts overall in the measure. Bottom line: New farm legislation has been put on an indefinite hold.
“The current situation that we face is that we’ve got people who believe there’s not enough reform in the farm bill that came out of committee,” Boehner told reporters today. “We’ve got others who believe there’s too much reform in the bill that came out of the committee, in our opinion leaving less than 218 votes to pass either an extension or to consider the entire farm bill. But when we get back we will deal with the issue of the farm bill."
Lawmakers from farm districts are furious that the House bill has stalled, and have attempted to organize a petition drive to force action before the November election. But so far, Boehner and his lieutenants have been able to contain the effort to collect the required 218 to bring the farm bill to the floor, according to The Hill newspaper.
Ernie Goss, a professor of economics at Creighton University in Omaha, says that many farmers are struggling to adjust to their relegated place in the pecking order of special interests on Capitol Hill. “I think farmers are feeling that their influence has diminished somewhat in Congress . . . and that they’re being ignored” Goss told The Fiscal Times. “We have become a nation of special interests . . . but [farmers] don’t feel they’re doing very well right now as a special interest group.”
Few doubt that farming is a tough, hard business with lots of risks and uncertainties, ranging from unpredictable weather and high fuel costs to the vagaries of global farm prices and demands. But at a time when the federal government appears headed for another fiscal crisis at the end of the year, many budget experts and advocacy groups say the nation can no longer afford a gold-plated agriculture program that takes virtually most of the risk out of farming.
While the overall economy is struggling to recover from the Great Recession, agribusiness is doing well and food prices are up. Net farm income this year will total an estimated $122.2 billion, a 3.7 percent increase from a year ago, according to the USDA. Moreover, farm businesses exported nearly $140 billion worth of products, exceeding imports of agricultural products by more than $37 billion. And farm equity is expected to increase to an all-time high of $2.3 trillion.
“Times have changed and agriculture has changed,” Maslyn of the American Farm Bureau Federation said. “The agricultural economy has been doing pretty well . . . and a lot of producers have come to accept this . . . and people are asking less of government in agriculture, if you can believe it.”
This story was updated at 3:05 pm, September 19, 2012.