Congress is coming perilously close to leaving Washington, D.C., without passing a farm bill. It is vitally important that a new five-year farm bill to be signed into law before Jan. 1, 2013 for the following reasons.
Thirty-seven programs that were included in the 2008 Farm Bill did not include baseline funding beyond Sept. 30. In order for these very important programs – five of which of which deal with conservation efforts and eight are related to renewable energy production – to continue, funding must be authorized in a new farm bill and they will continue to be dormant after Jan. 1.
Major dairy programs – including Milk Income Loss Contracts (MILC) and the Dairy Product Price Support Program (DPPSP) – expired with the end of the 2008 Farm Bill. If no action is taken on the farm bill by Jan. 1, federal dairy policy will revert to 1938 and 1949 law. This would result in a parity-based government-backed price of about $38/hundredweight for milk. Although farmers may benefit in the short run, the longer-term effects of a government buy-up of dairy products would be damaging to the dairy industry and consumption patterns.
Further challenges related to commodities will arise at the first harvest of the 2013 crop year in late spring, when winter wheat will be also be subject to 1938 and 1949 law. Commodities harvested thereafter would be subject to parity pricing structures that are not in step with today’s economy.
There is no permanent disaster protection program in place, even as most of the counties across the nation were declared agricultural disaster areas by the USDA at some point during 2012, and 55% of the nation’s pasture and rangeland rated in poor to very poor condition.
Like any business, farmers need certainty in today’s challenging economic times. Further delays in writing a five-year farm bill are problematic as farmers try to plan for the future or to secure credit. Agriculture employs 16 million Americans and Congress must provide some stability for those farmers, ranchers and rural businesses.
An opportunity to make major reforms to farm policy will be lost if no action is taken by Jan. 1. Both the House Agriculture Committee and the Senate versions of the farm bill eliminate the much-criticized direct-payments program, which pays crop farmers regardless of whether prices are high or low. If that program were extended for just one year, it would eliminate at least $5 billion of the $23 billion in budget savings in the Senate-passed bill. Congress can preserve those savings by passing a five-year farm bill this year that ends the direct payments program.
For these reasons, we stand united in support of a new five-year farm bill; any temporary extension would be a short-sighted, inadequate solution that would leave our rural America crippled by uncertainty. If a new farm bill is not passed by the end of the year, even deeper effects will be felt by all sectors of agriculture that will jeopardize the long-term viability of farm and conservation programs.