Economists say another farm bill extension likely

Published on: Jun 27, 2013

Similar to last year, economists expect Congress will need to again pass an extension of the farm bill as legislation looks to revert to 1949 legislation if it is not adjusted. However, the top ag leader on the Senate side has said she will fight against and extension to put pressure on the House to move forward a farm bill solution.

In discussions this week, Senate Agriculture Committee chairwoman Debbie Stabenow (D., Mich.) has said does not support a farm bill extension and will work to do all she can to prevent another one. She's criticized continuing programs that have widespread support to end such as direct payments.

Last week's failed farm bill vote reiterated the divided country and the inability for rural voters to unite the urban counterparts in coming behind funding for key agricultural funding. The two dividing issues remain food stamp funding and costs associated with crop insurance.

Chris Hurt, economist at Purdue University, said "odds favor a second year of extension of the old farm bill."

Roman Keeney, explained that programs for corn and soybean crops, for example, remain intact throughout the crop season, which extends well beyond September. "September 30 is not doomsday for farming and safety nets," he said. "Expiration of the fiscal year last year wasn't a big deal at all, and it probably wouldn't be this year, either."

Carl Zulauf, agricultural economics professor at Ohio State, said the House failure reflects a divided country and a divided farm bill constituency.

The real question is, "What do we do from here?"

"It's not clear why individual members voted against this bill – the SNAP program was an issue, as was cost," he said. "But in my experience, few legislators vote against a bill for a single reason."

The objective must remain to get a bill passed, Zulauf said. But the farm bill is an omnibus bill and thus has to satisfy a broad range of constituency concerns in order to move the bill forward.

Going forward, the House Agriculture Committee could come up with a new farm bill formulation and then move through the process, although most observers think this is unlikely at present, Zulauf said.

"Or the House could take up the Senate farm bill and vote on it with no amendments. If it passes, then we would have a farm bill," he said. "But it is likely the House won't pass the Senate version since the House-proposed farm bill differed from the Senate farm bill."

Some policy actors have said that the farm provisions should be in a separate bill with the SNAP program in its own bill. "Separation of the bill could lessen broad-based support to get a farm safety net passed."

"So that leaves the possibility of a one-year or multi-year extension of some version of the previous farm bill. That's something that we will have to keep an eye on over the next couple of weeks."