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Friday, February 24, 2012

Previewing the Next Farm Bill

Ralph M. Chite, Coordinator
Section Research Manager

Congress periodically establishes agricultural and food policy in an omnibus farm bill. The 112th Congress faces reauthorization of the current five-year farm bill (the Food, Conservation, and Energy Act of 2008, P.L. 110-246) because many of its provisions expire in 2012. The 2008 farm bill contained 15 titles covering farm commodity support, horticulture, livestock, conservation, nutrition assistance, international food aid, trade, agricultural research, farm credit, rural development, bioenergy, and forestry, among others. The breadth of farm bills has steadily grown in recent decades to include new and expanding food and agricultural interests. The omnibus nature of the bill can create broad coalitions of support among sometimes conflicting interests for policies that individually might not survive the legislative process. This breadth also can stir fierce competition for available funds, particularly among producers of different commodities, or between those who have differing priorities for farm subsidies, conservation, nutrition, or other programs.

One of the principal drivers of the farm bill debate will be the federal budget, which is more uncertain and difficult to predict than for past farm bills because of the congressional attention to deficit reduction. According to Congressional Budget Office estimates, if ongoing farm bill programs were to continue under current law, mandatory farm bill spending would be $994 billion over 10 years, with domestic nutrition assistance accounting for more than three-fourths of the total and the rest primarily for the farm safety net (commodity support and crop insurance) and conservation. How much of this baseline can be used to write a farm bill is unknown, given the uncertainty about deficit reduction that is beyond the control of the authorizing committees and may not be resolved for months. Several high-profile congressional and Administration proposals for deficit reduction are specifically targeting agricultural programs with mandatory funding, and the possibility of budget sequestration early next year further clouds the budget picture. Also, disaster assistance, most bioenergy programs, and some conservation programs expire without any baseline beyond their expiration date.

Traditionally, the primary focus of omnibus farm bills has been farm commodity price and income support policy—namely, the methods and levels of support that the federal government provides to agricultural producers. The 2008 farm bill combined counter-cyclical support with direct payments available primarily to growers of grains, cotton, and peanuts, regardless of farm commodity market prices. Proponents of the current approach to farm commodity support want a stronger safety net, with many focusing on enhancements to risk management tools such as crop insurance as a substitute for direct payments. Some opponents of the status quo cite the thriving farm economy as a reason for reducing federal support. Others point to competing policy priorities, including equitability concerns across the farm sector, and call for enhanced support for small and medium-sized farms, specialty crops, organic agriculture, local and regional food systems, healthy and nutritious foods, research, conservation, and rural development, among others.

Leaders of the House and Senate Agriculture Committees anticipate having a new farm bill completed before the end of this session. If the current farm bill expires without a new authorization or a temporary extension, it automatically would be replaced with permanent statutes for farm commodity support, which are not fully compatible with current national economic objectives, global trading rules, and federal budgetary or regulatory policies.

Date of Report: February 15, 2012
Number of Pages: 58
Order Number: R42357
Price: $29.95

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