Monday, October 15, 2012

Loss of farm bill puts pressure on food stamps

Posted: Monday, October 15, 2012 12:00 am | Updated: 2:48 pm, Sun Oct 14, 2012.
While the recent expiration of the latest farm bill might sound like it only affects farmers, the loss of this bill could impact many Iowans and could send us back to the original 1940s legislation.

AIR DATE: Aug. 6, 2012

 U.S. farmers have suffered greatly from drought this year, but the farm bill, promising help, failed to pass Congress before summer recess. In contention: food stamps. Judy Woodruff speaks to Daniel Newhauser of Roll Call about Congress' unfinished business and whether they'll make any headway before November elections.

The Food, Conservation and Energy Act of 2008, as the bill is officially known, provides subsidies for farmers as well as grants for renewable and efficient energy systems on farms. The act also funds the Food Stamp Program, which more than 12 percent of Iowa’s population is currently using. In total, over 45 million Americans are on food stamps.

“The lion’s share of the money in the farm bill was devoted to food stamps,” said Mack Shelley, university professor of political science and statistics at Iowa State.

“Students, almost by definition, are poor,” Shelley said. “For a lot of students, without food stamps, they would be hard pressed to make ends meet.”
The effect on farmers, however, will not be felt for a while.

“The commodity program that farmers mostly participate in has their 2012 crop already covered by the old farm bill, so it would be the 2013 crop that won’t have subsidies,” said Bruce Babcock, professor of agricultural economics. “So next fall is likely that, without a farm bill, farmers would notice something.”

Even if a new farm bill does not pass through the legislature and farmers next year do not have these subsidies, the farmers will not take a major loss. Of the $17.6 billion farmers make, only $500 million comes from these direct payments from the government.

“Farmers are not reliant; they don’t need the subsidies,” Babcock said. “There will be a loss. They’ll get less money, but it’s not like they’ll go out of business.”
The reason a new farm bill was not enacted when the old bill expired is political, specifically due to the different opinions of the two parties.
“The politics of the farm bill are tied up more so by food stamps,” Shelley said. “The really controversial part is the food stamps.”

It may take another month or so before a new farm bill is passed. Shelley believes it will not happen until after the election results are known, which would be a few days after Nov. 6. After that it will depend on which party has majority in Congress.

“If the Republicans come out ahead, they are definitely going to push ahead with major reductions in food stamps,” Shelley said. “If the Democrats win, they’re going to maintain the status quo essentially.”

The Republican vice presidential candidate Paul Ryan’s proposed budget cuts $11 billion in food stamp expenses.

“The conservation expenditures and especially the food stamps are definitely on the Republican hit-list,” Shelley said. “The Democrats, particularly on food stamps, want to continue to maintain and maybe even increase support for those parts of the bill.”

So What Happens If The Farm Bill Expires? Not Much, Right Away

Congress is set to make a brief appearance in Washington this week, then recess until after Election Day. That means a farm bill is likely to be left undone, just one of the many items on lawmakers' "to-do" lists that won't happen anytime soon.

The 2008 farm bill, which provides funding for a variety of nutrition programs, including the Supplemental Nutrition Assistance Program (formerly food stamps), as well as payments to farmers and agricultural programs, will technically expire Sept. 30.

So what does it mean if Congress just leaves it on the table? In theory, some fairly scary things. For example, in the absence of either a new bill or an extension of the 2008 law, federal price supports revert to their 1949 levels.
  Some farmers would be big winners — the government would pay huge bonuses for wheat, for example — while some farmers would get nothing at all. That's because some commodities, including soybeans, were added to the list of those supported by government after 1949.

"At that point, we'll have $38 milk," Rep. Collin Peterson, D-Minn., told a rally at the Capitol last week. "So what do you dairy farmers think about that?" (That $38 refers to the price per 100 pound weight — the wholesale pricing unit. Basically, it works out to nearly four times what dairy farmers are guaranteed now.)

But the reality is, almost none of the changes would happen right after Sept. 30.

"We actually have until about Jan. 1 before we run into a lot of administrative problems with this bill reverting to some very high prices," says Mary Kay Thatcher, director of congressional affairs for the American Farm Bureau Federation.

That's because while the date on the law matches the federal fiscal year, the 2008 measure covers all of 2012's crops. So even if they haven't been harvested yet, things growing now are covered by the 2008 legislation. The first crop that would be affected by the new price supports "would be next spring when we harvest winter wheat," Thatcher says.

Vincent Smith, a professor of economics at Montana State University and a visiting scholar at the American Enterprise Institute, says the real reason supporters of the farm bill are in such a rush to get their bill done has more to do with budget politics than with the actual mechanics of the programs.
"They want to have a farm bill now that locks Congress and the taxpayer into obligations based on either the Senate or the House bill," he tells NPR. "What they're concerned about is that, if serious deficit-reduction talks take place, then a lot more money than was initially identified to come out of the farm bill by the "supercommittee" a year and a bit ago will have to come out of the farm bill."

A version of the farm bill was approved by the Senate earlier this year; a House committee approved a different version, including deeper cuts to food stamps.

When was the last time Congress let the farm bill lapse? The last time it was up for renewal: 2007. "The bill expired on Sept. 30, and we didn't pass the first extension until the 26th of December," says Thatcher. "And then I think it was extended another four or five times after that before we finally got the actual bill done."

So both Thatcher and Smith say to look for Congress to do some kind of extension of farm programs during its postelection lame duck session. But also, don't panic in the meantime.

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