Farm bill crunch time upon leaders

Published on: Nov 21, 2013

For farm bill completion this year, this week remains crucial in advancing key compromises that can allow for final passage. To help in the matter, the White House Rural Council released a report identifying the impact of a new farm bill on the economy as a whole.

Secretary of Agriculture Tom Vilsack said the new report provides "additional ammunition" to the leadership of the farm bill conference committee on completing a bill by documenting the direct relationship between the agriculture economy and the rest of the economy.

The report notes that in 2011, the output of America’s farms contributed $139 billion to the nation’s gross domestic product (GDP).

But the overall contribution of the agriculture sector to GDP is larger than this figure represents, as the wide range of sectors related to agriculture—including forestry, fishing, and related activities; food, beverages, and tobacco products; textiles, apparel, and leather products; food services and drinking places—rely on agricultural inputs in order to contribute additional value to the economy. Together, these sectors contributed $743 billion to U.S. GDP in 2011, accounting for nearly 5% of economic output, the report outlined.

Press reports indicate the top four House and Senate Agriculture Committee leaders and their staff met Wednesday for about 90 minutes and continue to hash out the details for a final farm bill.

Both House Agriculture Committee chairman Frank Lucas (R., Okla.) and Senate Agriculture Committee chairwoman Debbie Stabenow (D., Mich.) said progress was made in the discussions, but said more needed to be done. House Agriculture Committee ranking member Collin Peterson (D., Minn.) who's been more pessimistic as of late regarding a deal, when asked if a deal were possible this week, he said, "I think it is."

Some skepticism has arisen this week from Senate conservatives including past chairman Sen. Pat Roberts (R., Kan.) and former agriculture secretary Sen. Mike Johanns (R., Neb.). Johanns went on record stating he'd support an extension of the current bill rather than moving forward with legislation with the House's high target prices.

However, Vilsack reminded that an extension comes with costs and it doesn't provide the reforms this bill proposal provides. "The key here is to focus on getting the job done," the secretary told reporters on a media call Thursday morning.

When Vilsack was asked whether the timeline set out before the committee was too ambitious, he noted that Congress acts best when there are timelines. "I think Congress is capable of acting quickly. If there is a will, there is a way," he explained.

On the nutrition title, Vilsack noted that he's hearing more statements from the conferee leaders that the focus is less on numbers and more on policy. "I think there are ways if you get the policy right, you get the number right." This can be done in ways to encourage states to do a better job of creating work opportunities and educating recipients, he said.

Tuesday the National Corn Growers Assn., the American Soybean Assn. and the U.S. Canola Assn. offered a new proposal on for the commodity title including which payment acres should be established for price and revenue programs.

In order to avoid another extension of the 2008 farm bill, the organizations proposed using the average of planted acres during the five years previous to the current year as the payment base for both the revenue and the price programs. The average would thus move forward, adding and dropping a year every year, in order to remain as current as possible without including the current year, which would serve as a deterrent to building base. Consideration should be given to how effective revenue protection can be provided at both the farm and county levels under this approach.

The recent proposed change in the Renewable Fuels Standard could dampen corn demand prospects and increase supplies, which could make target price considerations an important component of the farm bill.

Vilsack said he doesn't foresee target prices being the lynchpin for ag's safety net as it has in the past. Instead crop insurance will hold that power as it helps minimize or mitigate risk.