Path to the 2012 Farm Bill: No Bill is Better than a Bad Bill
December 12th, 2012
Last week we tried to address what a good 2012 Farm Bill deal would look like. This week, as last, the so-called “gang of four” — Senate Agriculture Chair and Ranking Member Debbie Stabenow (D-MI) and Pat Roberts (R-KS) and House Agriculture Chair and Ranking Member Frank Lucas (R-OK) and Collin Peterson (D-MN) — are meeting on the farm bill. These four leaders are trying to reach a deal that would bypass both the House Floor and a House-Senate Conference Committee. It is unclear how close they are to reaching an agreement, with strong disagreements remaining on the structure of new commodity subsidies. There are indications emerging, though, that some of the modest but important farm safety net reforms in the Senate-passed bill are being ditched or watered down as negotiations continue.
We said it last week and will say it again. No bill is better than a bad bill with respect to a new five-year farm bill. Both the Senate-passed bill and the House Agriculture Committee-passed bill contain redundant new safety net programs for commodity production, even before trying to meld them in an agreement. This built-in redundancy in both bills is the product of giving everyone the safety net option they prefer rather than fashioning more-streamlined, coherent policy. This built-in redundancy, likely only to get worse in a final deal, has a fairly high potential of being fiscally explosive in the years to come.
Moreover, neither bill contains the deficit-reducing safety net proposals spelled out by President Obama in detail and implied, but with less detail, in the House-passed budget championed by Representative Paul Ryan and House Speaker John Boehner. In fact, both the bill passed by the Senate and the bill approved by the House Agriculture Committee save less than half of what both Obama and Boehner have proposed and presumably still stand behind.
In light of these huge deficiencies, it is our view that there can be no compromise on the Senate-passed reforms (many of which we believe would also have been House-passed reforms had the full House been given the opportunity of voting on the bill). A minimally acceptable deal must include the Senate-passed:
- $50,000 ($100,000 married) per farm limit on all forms of commodity and revenue payments;
- $75,000 ($150,000 married) per farm limit on all forms of marketing loan gains and payments;
- reform of the “actively engaged in farming” rules that make the payment limits above effective rather than window dressing;
- lower Adjusted Gross Income (AGI) threshold for commodity subsidies and the lower crop insurance premium subsidy rates for those who exceed the AGI;
- new directives for the Risk Management Agency to develop improved insurance products for underserved segments of agriculture;
- re-linkage of soil and wetland conservation requirements to premium subsidies;
- a true nationwide “sodsaver” provision to prevent subsidized destruction of grasslands; and
- the subsidies for planted acres capped at recent average plantings rather than at the significantly larger base acres.
In addition, the misguided House Committee bill’s double cut to the Conservation Stewardship Program must be rejected. In addition, improvements must be made to renewed funding for the small but critically important farm bill programs for beginning and minority farmers, rural development, local food, renewable energy, and organic farming, and the harmful and inappropriate policy riders added by the House Committee to curtail market competition, contract reform, and public health and safety and environmental protection must shelved in their entirety.
If a bill with those components can be achieved, and we believe it can, then we will be there to help fight for its passage in these waning hours of the lame duck session. But if it cannot, we believe the better course of action is to reach a substitute deal on a modified short-term extension of the recently expired 2008 Farm Bill, one that addresses five key points that cannot wait, and postpones the rest of the final action on a new bill until early next year.
There is a lot riding, to say the least, on the final clicks on the farm bill clock for this year. We hope wise choices are made before the buzzer sounds.