Senate and House Agriculture Committees Pass Alternative 2013 Farm Bills

Jim Pease, Extension Economist, Department of Agricultural and Applied Economics

Although the 2012 Farm Bill died on the vine because of House opposition, it appears that the political calculus in Washington has changed in 2013, and a new 5-year Farm Bill may be enacted this summer. The House Committee on Agriculture passed H.R. 1947, the Federal Agriculture Reform and Risk Management (FARRM) Act of 2013, on May 16 by a mainly bi-partisan vote of 36-10, and the Senate Committee on Agriculture, Nutrition and Forestry passed S. 954, the Agriculture Reform, Food and Jobs Act of 2013, on May 14 by an even more bi-partisan vote of 15-5. Both committee Chairs and Ranking Members supported their respective legislation. Prospects now appear good for consideration on the House and Senate Floors, although passage by either chamber does not guarantee a compromise bill will emerge in Conference Committee.

The House committee has the summary, full legislative text, and Congressional Budget Office (CBO) score available on its website, and the Senate committee similarly has the summary, full legislative text, and CBO score available.

The Bills are quite similar to each other, and primarily differ in the amount of funding authorized for programs. Dr. David Schweikhardt of Michigan State University has prepared a succinct table, presented on the following pages, of House and Senate provisions with the CBO-estimated changes in 10-year funding.

 Title House Provisions (H. 1947, Federal Agriculture   Reform and Risk Management Act of 2013) Senate Provisions (S. 954, Agriculture Reform,   Food and Jobs Act of 2013) Budget Change, 2014-23ii
I. Commodity Programs 1. Repeal Direct,   Counter-cyclical, and Average Crop Revenue Election (ACRE) programs2. Establish Price Loss   Coverage and Revenue Loss Coverage programs3. Marketing loan program   continued4. Sugar program continued

5. Repeal Dairy Product Price   Support Program and Milk Income Loss Contract Program

6. Establish Dairy Producer   Margin Protection Program and Dairy Market Stabilization Program

7. Continue Supplemental   Agricultural Disaster Assistance program for livestock

8. Continue Tree Assistance   Program for fruit

1. Repeal Direct,   Counter-cyclical, and Average Crop Revenue Election (ACRE) programs2. Establish Agricultural   Risk Coverage and Agricultural Market Payments programs3. Marketing loan program   continued4. Sugar program continued

5. Repeal Dairy Product Price   Support Program and Milk Income Loss Contract Program

6. Establish Dairy Production   Margin Protection Program and Dairy Market Stabilization Program

7. Continue Supplemental   Agricultural Disaster Assistance program for livestock

8. Continue Tree Assistance   Program for fruit

H:-18.6BS: -17.2B
II. Conservation 1. Reduce Conservation   Reserve Program enrollment cap from 32M acres to 24M acres2. Merge Environmental   Quality Incentives Program with other working lands programs3. Merge various conservation   easement programs into single Agricultural Conservation Easement Program4. Conservation Stewardship   Program enrollment cap of 8.7M acres 1. Reduce Conservation   Reserve Program enrollment cap from 32M acres to 25M acres2. Merge Environmental   Quality Incentives Program with other working lands programs3. Merge various conservation   easement programs into single Agricultural Conservation Easement Program4. Conservation Stewardship   Program enrollment cap of 10.3M acres H:-4.8BS: -3.6B
III. Trade Minimal changes Minimal changes H:+150MS:+150M
IV. Nutrition 1. Restrict categorical   eligibility in Supplemental Nutrition Assistance Program2. Restrict use of utility   assistance benefits in calculation of SNAP benefits3. Require eligible retailers   to offer wider selection of food products4. Increase Emergency Food   Assistance funding for food banks

5. Decrease Nutrition   Education funding

1. Restrict use of utility   assistance benefits in calculation of SNAP benefits2. Require eligible retailers   to offer wider selection of food products

3. Increase Emergency Food   Assistance funding for food banks

H:-20.5BS: -4.0B
V. Credit Minimal changes Minimal changes H&S: 0
VI. Rural Development 1. Increase Valued-Added   Marketing Grants funding 1. Increase Valued-Added   Marketing Grants funding2. Increase Rural Water and   Waste Disposal Grants funding H:+96MS:+132M
VII. Research and   Extension 1. Increase Specialty Crop   Research Grants funding2. Increase Organic   Agricultural Research and Extension funding3. Increase Beginning Farmer   and Rancher Development funding 1. Increase Specialty Crop   Research Grants funding2. Increase Organic   Agricultural Research and Extension funding3. Increase Beginning Farmer   and Rancher Development funding4. Establish Foundation for   Food and Agriculture Research H:+760MS:+681M
VIII. Forestry Minimal changes Minimal changes H: 0S:+10M
IX. Energy Minimal changes 1. Increase Rural Energy for   American Program funding2. Increase Biorefinery   Assistance funding3. Increase Biomass Crop   Assistance Program funding4. Increase Biomass Research   and Development funding H: 0S:+780M
X. Horticulture 1. Increase Specialty Crop   Block Grants funding2. Increase Farmers Market   and Local Food Promotion funding3. Increase Plant, Pest and   Disease Management funding 1. Increase Specialty Crop   Block Grants funding2. Increase Farmers Market   and Local Food Promotion funding3. Increase Coordinated Plant   Management funding H:+543MS:+359M
XI. Crop Insurance 1. Increase Supplemental   Coverage Option program funding2. Establish cotton and   peanut revenue insurance programs 1. Increase Supplemental   Coverage Option program funding2. Establish cotton and   peanut revenue insurance programs3. Require crop insurance   program participants to meet conservation compliance standards H:+8.9BS: +4.9B
XII. Miscellaneous 1. Increase Noninsured Crop   Assistance Program funding 1. Decrease Noninsured Crop   Disaster Assistance Program funding H:+161MS: -294M
TOTAL H: -33.3B S: -18.0B
Source: Schweikhardt,   David. Policy Brief: Comparison of 2013 House and Senate Farm Bill Provisions   and Estimated Budget Impacts. Department of Agricultural, Food and Resource   Economics, Michigan State University. May 2013.

Many Farm Bill titles will undergo changes in form or funding, but perhaps none more significant than the Commodities (Title I). In both Bills, Direct Payments, Counter-cyclical payments and Average Crop Revenue Election (ACRE) payments are repealed.  Only the marketing loan program remains of the former measures of direct commodity support. Instead, the Bills establish new “safety net” revenue protection programs to help farmers insure against price and revenue risk.  Although not identical, the two bills repeal dairy price support programs and Milk Income Loss Contracts, replacing them with new programs that protect producer margins based on the difference between the all-milk price and a national feed cost. Both bills continue the Livestock & Supplemental Disaster Program, which provides disaster assistance for livestock producers experiencing losses due to drought.

The Conservation Title will see substantial change, and there has been surprisingly little debate about the largely consistent measures taken by both committees. In short, both bills consolidate programs and reduce funding. Three types of conservation programs have evolved over Farm Bills dating back to 1981: land retirement programs, working lands programs, and farmland easement programs.  However, the number of programs in each category has proliferated, and Congress is consolidating many programs and reducing others. In all, 23 conservation programs are consolidated into a much more manageable conservation portfolio. The Environmental Quality Incentives Program (EQIP) largely maintains its funding, but absorbs the functions of several other Working Lands programs. The Conservation Stewardship Program (CSP) is maintained in both bills, but limited in scope and size. All easement programs are consolidated into one overarching Agricultural Conservation Easement Program.

Both bills scale back the highly successful and popular Conservation Reserve Program (CRP), which has created temporary conservation easements on up to 39 million acres of environmentally sensitive farmland. Maximum enrollment in the CRP is reduced to 24-25 million acres. It remains to be seen what the environmental consequences are of bringing this acreage back into production. In some cases, expiring acres will receive priority for working land conservation programs such as EQIP. It should be noted that the total cuts in conservation programs are only 20-25% of the cuts to commodity programs.

There is a consensus between the House and Senate bills that farmer safety net should rely on insurance, and both bills increase total spending on Crop Insurance programs. In particular, the Supplemental Coverage Option (SCO) receives additional funding. SCO is a “shallow loss” program that allows famers to insure higher yield or revenue levels than otherwise available. Both bills create new cotton and peanut revenue insurance programs, collectively referred to as STAX programs.  A major item that will be an obstacle to House and Senate agreement is the Senate requirement that crop insurance program recipients be required to undertake the same Conservation Compliance measures that have been required of commodity support programs.

The major obstacle to passage of a 2013 Farm Bill lies with the alternative size of cuts to food and nutrition programs, for which the House restricts eligibility for Supplemental Nutrition Assistance Program (SNAP) payments, saving $20.5 billion over 10 years. The Senate reduces eligibility as well, but the cuts amount to $4.0 billion.  It is as yet unclear whether urban legislators will be able to block a Farm Bill with sizeable cuts to SNAP payments.  On the other hand, it is equally unclear whether deficit-demanding Republican legislators in the House would rather torpedo the Farm Bill if they don’t get even greater spending reductions.

At this writing, Senate supporters on the floor have successfully defended the basic committee bill, and are attempting to reduce the number of amendments that will be voted on before the full Senate votes on the bill. Senator Reid filed a cloture motion on S.954 on June 4, and the bill may be voted for passage as early as this week or next.  In the House, Republican leaders have declared that they want a bill, but the House Ag committee bill still faces an uncertain future.

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