What about the farm bill?The passage of a 2012 farm bill is obviously an issue of great importance for farmers and ranchers throughout the Midwest and Northern Plains.
By: Derrick Braaten, Agweek
BISMARCK. N.D. — The passage of a 2012 farm bill is obviously an issue of great importance for farmers and ranchers throughout the Midwest and Northern Plains. Agweek has provided some thoughtful, in-depth coverage of the issue, especially through the columns authored by Daryll Ray and Harwood Schaffer. I thought it might be helpful, though, to take a step back and explain the current situation on a practical level.
The 2008 farm bill expired on Sept. 30. While this sounds ominous, it does not mean that all farm programs administered by the federal government simply disappeared, and in truth, it is not entirely accurate to state that the farm bill “expired.” There are some programs that are no longer funded as a result of sunset provisions in the 2008 farm bill, such as the Milk Income Loss Contract program, which provides price support for dairy farmers. New enrollments for Conservation Reserve Program and Wetlands Reserve Program will be impossible without a new farm bill and new funding in place. On the other hand, most if not all of the crop-specific programs are funded to cover crops from the 2012 crop year.
One of the reasons for the differences in the continuation of these programs relates to whether their authorizing statute contains sunset provisions, which are provisions in the 2008 farm bill that terminate the authority for a specific program. Additionally, some programs receive mandatory funding through the provisions of the 2008 farm bill, whereas some programs receive discretionary funds through the appropriation bills. With respect to discretionary funding, because the appropriation bills only authorized spending until the end of the government’s fiscal year, there is typically no longer funding available for such programs after Sept. 30. Congress has passed what is referred to as a Continuing Resolution, however, which continues the funding under the 2012 appropriation bill levels for six months.
This is a stop-gap measure that merely buys time and does not necessarily continue all programs in the 2008 farm bill.
Congress will reconvene in November after the elections, however, and most likely one of two things will happen; either we will see a new farm bill, or we will see an extension of the 2008 farm bill until our representatives are able to reach common ground and pass a new farm bill. Admittedly, the task is far more difficult this time since it is necessary to make significant budget cuts in many key programs.
It is often noted that if Congress fails to pass a new farm bill, the legislation will revert to the permanent law found in the Agricultural Adjustment Act of 1938, and the Agriculture Act of 1949. Price supports under these acts could have some extreme results, such as the oft-quoted price support for milk, which would be around $38 per hundredweight, far above market price.
Consequently, it is unlikely that Congress would allow such an extreme result.
It should be remembered that in 2007, the first extension of the farm bill was not passed until December, and after that, there were several extensions before Congress finally agreed to a new farm bill. While it is likely that the debate surrounding the 2012 farm bill will be contentious, and that Congress will pass several extensions before it can agree on a new package of programs, it is unlikely that Congress will fail entirely to pass a new farm bill. On the other hand, farmers and ranchers should continue to put pressure on their representatives until a new farm bill is in place.