ASFMRA: Extension of farm program extends uncertainty

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Kirk Weih, AFM of Hertz Farm ManagementKirk Weih Congress extended the 2008 farm bill on Jan. 1 through Sept. 30, 2013. The uncertainty created by this extension is due to the fact that 37 programs in the original 2008 farm bill did not have a “budget base line” to carry forward after Sept. 30, 2012. The extension does include commodity programs for the 2013 crop year, (direct payments, ACRE, the Milk Income Loss Contract (MILC) and the traditional dairy support program).

USDA Farm Service Agency officials must now decide how to handle the Average Crop Revenue Election (ACRE) program for the 2013 crop. ACRE was supposed to end Sept. 30, 2012, under a one-time enrollment decision. One question is whether the one-time enrollment decision applies to the 2013 crop. To date, ACRE has been a cost saving measure by reducing direct payments 20 percent on approximately 36 million acres, primarily in corn, soybean and wheat producing areas. This translates into savings of $3 to $5 an acre or $140 million to $150 million per year over the past three years.

Direct payments to producers will continue for 2013 crops at a cost of approximately $4.9 billion. This conflicts with the Senate passed farm bill and the House Agriculture Committee passed bill, which both eliminated direct payments. Both the Senate and House bills contained reductions in the Supplemental Nutrition Assistance Program (SNAP). Speaker Boehner was unable to garner enough votes in the House to support reductions in food stamps.

The Conservation Reserve Program is maintained at the same level of 32 million acres. The Grassland Reserve Program and Wetlands Reserve Program were reauthorized as well and will be able to continue to enroll acres under remaining 2008 farm bill authorizations.

Senate Ag Committee Chairman Debbie Stabenow will be working with Sen. Thad Cochran (R-Miss.), the new ranking member on the Senate Agriculture Committee. It is not clear when a markup will be scheduled in the Senate. The Congressional Budget Office (CBO) will release a new baseline for the Farm Bill later in March. Many members of the Senate and House Ag Committees are concerned this will reduce the amount of money available for the farm programs. Stabenow anticipates this CBO new budget baseline will reduce spending on nutrition programs and increase the budgetary authority for crop insurance.

Sen. Cochran will be replacing Sen. Pat Roberts (R-Kan.) on the Senate Ag Committee. This will provide for more influence for southern senators who were upset over proposed changes in the 2012 farm bill legislation. The Senate-passed bill last year was unacceptable to rice and peanut growers.

The funding for crop insurance has remained the same since it is separate legislation. Ultimately, the risk management provided by the farm bill extension and crop insurance will provide for short-term stability as producers plan for their 2013 crops. It is critically important that we continue to present our priorities as members of ASFMRA to influence the outcome of negotiations on a new farm bill.


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