There are 37 programs in the 2008 Farm Bill that will be expiring in a couple years because there is no guaranteed funding after September 2012. Should they expire like worthless options at the Board of Trade or should there be an effort to fund them at any cost? That’s totally up to you – and the US taxpayer.

As the political winds threaten to keep a tighter grip on the U.S. Treasury purse strings, there will be many programs in the federal government that will disappear for lack of funding. And at least three dozen of those may quickly be identified in the USDA budget. The Congressional Research Service (CRS) has identified the programs, which cost the taxpayer between $9 and $10 billion to operate. The CRS report says the 37 programs had received mandatory funding for the life of the 2008 Farm Bill, but there is no budget baseline that carries them beyond 2012, such as public feeding programs, direct payments or crop insurance. Their cost is about 4% of the $283 billion five-year farm bill, or 11% of the cost if the $100 billion nutrition title is removed.

CRS Farm Specialist Jim Monke says the largest one is the permanent disaster assistance program, which was budgeted for $4.8 billion in the farm bill, but would be continued at $3.7 billion based on estimates made last March. There are also five conservation programs that were initially funded at $2.105 billion, but would require $3.2 billion in the next farm bill if they were continued.

When members of the House and Senate ag committees begin to look at the programs and whether they should be funded, Monke says the decision-making process will be something like this:

“If selected for continuation, would the program continue at its current higher cost, or be redesigned in the next farm bill to cost less? Thus, which of the two approaches is better depends on whether one believes Congress would change program parameters, for example, to reduce a program that has become more expensive than initially expected, or whether Congress would continue current program provisions and pay a higher cost than in 2008 when extending a program.”

On the chopping block?

Monke says some of the programs are pilot programs or are new programs without a large constituency. He says six are bio-energy programs; five are related to specialty crops or beginning and minority farmers. However, the wetlands reserve and the grasslands reserve programs have been well established for many years.

If any of the programs are to be continued, the agriculture committees have to pay for them from the funding allocated for farm programs, and cannot fund them from any “new” money. Other programs have to be reduced or sacrificed to pay for the 37 that are nearing expiration.

For example, the conservation programs that are within the 37 expiring are: Wetlands Reserve, Grasslands Reserve, Voluntary Public Access and Habitat Incentive Program, Small Watershed Rehabilitation Program and Desert Terminal Lakes. In the Rural Development sector of the farm bill, programs destined for termination include: Rural Micro-entrepreneur Assistance Program, Funding of Pending Rural Development Loan and Grant Applications, and Value-Added Agricultural Market Development Program Grants.

Monke reports that one program that ends a year before the expiration of the farm bill is the supplemental agricultural disaster assistance program that was created in the 2008 Farm Bill. He says it was authorized in an effort to end the ad hoc crop disaster assistance. Another is the ethanol blenders’ tax credit, which expires at the end of December.

Summary

The current farm bill has $283 billion worth of programs over its five year life, most of which will continue into the next farm bill. But there are 37 programs worth $9 to $10 billion that are destined for expiration because there are no provisions for continued funding. Included are the permanent disaster program and the wetlands reserve program. Some are pilot programs, but there are more than $2 billion worth of conservation programs, the $4 billion disaster program, and a variety of small organic programs.