2013 Farm Bill Update - July 2013
These differences involve important philosophical questions: how often should Congress debate the farm safety net and how market oriented should farm safety net programs be. In addition, concern exists among southern crop producers that the distribution of payments from crop insurance differs notably for peanuts and rice from the distribution of direct payments and target price deficiency payments.
The broader point is that, even if the food assistance title was not an issue, it is not clear that a Conference Committee can bridge the differences that exist on farm safety net programs.
For a more detailed discussion of some of these issues, see the May 9, 2013 farmdoc post titled, "Payments by U.S. Farm Safety Net Program: Differences by Crop," by Carl Zulauf and Gary Schnitkey (available here); the May 23, 2013 farmdoc post titled, "Comparison of Approaches to Price Supports for the 2013 Farm Bill," by Nick Paulson (available here); and the June 7, 2013 farmdoc post titled, "Market Distortion and Farm Program Design: A Case Examination of the Proposed Farm Price Support Programs," by Carl Zulauf (available here).
Many paths forward exist, with these four likely spanning the possible outcomes:
- The Conference Committee reaches an agreement that is enacted into law.
- The Conference Committee does not reach agreement and the current 2008 farm bill extension is extended for another year. As an aside, a 2-year extension could occur if Congress wants to avoid a farm bill debate in a Congressional election year.
- The Conference Committee does not reach agreement and the 2008 farm bill is extended again but in a different version. For example, some observers have discussed reducing direct payments if another extension occurs.
- The Conference Committee does not reach agreement and permanent law is repealed, ending farm commodity support programs. This outcome seems unlikely but we do not think its probability is zero. Should this outcome occur, the farm safety net becomes the insurance program, meaning multiple-year losses would not be covered by the farm safety net.
The interplay of politics, process, and content will determine in part which of these paths or if an entirely different path is taken. Senate leadership and President Obama have both indicated they will not accept a farm bill without a food assistance title. A farm bill with a food assistance title would require a very different coalition in the House than the coalition that passed its farm bill. Specifically, the support of a large number of Democrats would be needed. Is such a coalition attainable?