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Monday, August 13, 2012

Expiring Farm Bill Programs Without a Budget Baseline

Jim Monke
Specialist in Agricultural Policy

The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) authorizes most federal farm and food policies. Its authorizations generally expire at the end of FY2012, or with the 2012 crop year for the farm commodity programs.

The farm bill provides the mandatory funding for many farm bill programs, including the farm commodity programs and some nutrition, conservation, research, bioenergy, and rural development programs. Funding to write the next farm bill will be based on the baseline projection of the cost of these farm bill programs by the Congressional Budget Office (CBO), and on varying budgetary assumptions about whether programs will continue.

Some farm bill programs have baseline beyond the end of the 2008 farm bill, while others do not. Those with continuing baseline essentially have built-in future funding if policymakers decide the programs should continue in their current form. However, 37 programs that received mandatory funds during the 2008 farm bill are not assumed to continue from a budgetary perspective because they do not have a budgetary baseline beyond FY2012. If policymakers want to continue these programs in the next farm bill, they will need to pay for the programs with offsets.

Depending on the approach used to estimate a cost to extend the 37 programs for five years, an estimated $9 billion to $14 billion of offsets from other sources may be needed. This is nearly 3% of the $507 billion five-year CBO baseline for farm bill programs (FY2013-FY2017), or 13% of the $108 billion five-year baseline if the nutrition title is excluded. Finding this level of offsets may be a difficult task in a tight budget environment, especially when many observers believe that some of the farm bill baseline may be lost to deficit reduction.

The 37 provisions without baseline beyond FY2012 are spread among 12 of the 2008 farm bill’s 15 titles. The title with the most such provisions is the energy title (8), followed by conservation (5), nutrition (5), and horticulture and organic agriculture (5). Just two of the provisions—the agricultural disaster assistance program and the Wetlands Reserve Program, each with uncertainty about future costs—account for about 80% of the value of programs without future baseline.

The House and Senate proposals for the 2012 farm bill provide funding to continue some of the 37 programs without budget baseline. The Senate farm bill, S. 3240, provides more than $3 billion of mandatory funding for 26 of the programs, and the House farm bill, H.R. 6083, provides more than $1.9 billion of mandatory funding for 14 of the programs.

The proposed one-year extension of the 2008 farm bill and disaster assistance programs (H.R. 6228) would extend mandatory funding only for some of the disaster programs. Some of the other programs without baseline explicitly receive an authorization of appropriations in FY2013 and generally may be included in the extension of general program authority, but do not receive any new mandatory funding.

Date of Report: July 31, 2012
Number of Pages: 23
Order Number: R41433
Price: $29.95

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