Helmut Schmidt, Published September 15 2012
Minnesota Rep. Peterson: Farm bill unlikely soon
That won’t affect the nutrition and farm programs covered by the 2012 farm bill, at least until Jan. 1, Peterson and ag experts say.
But long term, taxpayers could end up paying more, Peterson said.
Without a new farm bill, planned food stamp cuts won’t take effect. Plus, absent a new farm bill, federal law requires crop price supports to default to those in the 1949 farm bill – much higher than today for commodities such as milk and wheat, he said.
Peterson said Republicans are rolling the dice, gambling the November election delivers them the Senate and the presidency. Then they can write a farm bill to their liking – perhaps gutting the sugar and dairy programs, or slashing aid such as food stamps, he said.
In the meantime, Peterson said Republicans are seeking a 90-day extension of the 2008 farm bill.
“That is complete nonsense because there is no problem for 90 days. There’s a problem the 91st day,” Peterson said. “This is another disingenuous gesture to try to get their members off the hook.
“This is all cover so they can vote for this and tell people at home they did something,” Peterson said. “They’re just playing all kinds of games.”
On the GOP side of the aisle, Rep. Rick Berg, R-N.D., has called on Republican leadership to approve the House version of the 2012 farm bill before the session runs out.
Berg, now running for the Senate against Heidi Heitkamp, was at a “Farm Bill Now” rally Wednesday in Washington.
He’s also been cited by POLITICO for triggering discussion among House leaders on the topic.
Chris Pack, a Berg aide, said his boss was “100 percent committed” to getting a five-year farm bill approved.
“As Rick said yesterday, when he was interviewed by CNN, ‘The Legislature works best under deadline,’ ” Pack said.
Senate bill passed
The Senate passed its version of the farm bill in June. That bill, with a price tag estimated at nearly $1 trillion over 10 years, must be reconciled with the House bill by a conference committee. Then both the House and Senate must pass the resulting compromise bill before it could become law.
About 80 percent of funding in modern farm bills is tied to nutrition-related programs such as food stamps and school lunch subsidies.
For example, about
47 million Americans, or 15 percent of the nation’s population, received food stamps in June from the Supplemental Nutrition and Assistance Program, USDA reported.
Farm bills also contain funding for a wide variety of other programs, including forestry, energy, emergency heating and disaster aid.
Only 20 percent of farm bills focus directly on farming, with price supports for wheat, corn, soybeans and other crops; crop insurance; land conservation; plant pest and disease management; and even funding for farmers markets.
Government farm bill payments in North Dakota vary annually, said Andy Swenson, a North Dakota State University farm management specialist. Direct payments are about $220 million per year and conservation reserve program payments are about $100 million.
Swenson said disaster payments in fiscal year 2010 were $311 million and in fiscal year 2011 were $160 million.
The Environmental Working Group, using data from the USDA, says that between 1995 and 2011, Minnesota received $16.2 billion in farm subsidies, while North Dakota received $14 billion.
Minnesota’s subsidies included $10.1 billion for commodities (crops and livestock), $3.35 billion for crop insurance, $1.96 billion for conservation, and $722 million in disaster aid, EWG reported.
North Dakota’s subsidies included $6.3 billion for commodities, $3.9 billion for crop insurance, $2 billion for conservation, and $1.76 billion for disaster aid, EWG reported.
‘It’s a jobs bill, too’
Bill Craig, a University of Minnesota Extension agricultural business management educator based in Crookston, expects the current farm bill to be extended, with action on a five-year bill after the election.
The problem for farmers in letting a farm bill linger as unfinished business too long is that it will make it harder to plan for planting and more difficult to get operating loans from banks, Craig said.
He said the farm bill acts as a security blanket for the ag sector. Without it, over time a lot of jobs could be lost.
“It’s more than a farm bill and a food bill, it’s a jobs bill, too,” Craig said. “That’s why it’s important and garners so much support from nonfarm states.”
Peterson said the first big effect of no farm bill would come on Jan. 1. That’s when the USDA would be required to support a price of a minimum of $38.48 per hundredweight for milk. In contrast, milk prices averaged about $16.60 per hundredweight in July, USDA reports.
Next comes winter wheat in May, when the harvest begins in Texas.
The 1949 parity price for wheat is 16.50 per bushel, and the government would have to support a price that’s 90 percent of that, Peterson said.
Wheat on Friday was selling for $9.05 to $10.66 per bushel, depending on the variety, quality and when it’s delivered, according to the Portland (Ore.) Daily Grain Report.
Such high price supports are not sustainable, Peterson said, and could force action during Congress’ lame duck session.
“I’m guardedly optimistic that this would be the impetus” to get action, he said.
Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583