Government inaction could bring high milk prices; food stamps not affected
In the wake of the government shutdown, the ag industry is twisting in the wind, wondering if a new Farm Bill will ever be approved. Without a Farm Bill extension, farmers and ranchers are uncertain what U.S. Department of Agriculture (USDA) programs will continue. Some services already are impacted. At the Farm Service Agency office, prerecorded messages advise to email the office. This message states it is uncertain when the inquiry will be answered, due to the lack of funding due to the partial government shutdown. Even government lawsuits are being stalled.
U.S. Cattlemen’s Association Executive Vice President Jess Peterson updated cattlemen during an Oct. 1 Horn Wrap conference call. He explained the House approved House Resolution (HR) 361 -- that combined the nutrition bill with the farm-programs bill -- making a complete House version of a Farm Bill package.
Congress was waiting for U.S. Speaker of the House John Boehner to appoint House conferees to continue the Farm Bill process, Peterson said.
In response to questions posed by the Wilson County News after the Oct. 1 government shutdown, U.S. Rep. Henry Cuellar of Texas said negotiators from the House of Representatives and the Senate may take up the bill in the next week or two.
Technically, the extension of the 2008 Farm Bill expired Oct. 1. The Supplemental Nutrition Assistance Program (SNAP), also known as “food stamps,” was not affected, though it’s a substantial part of the bill.
“The overarching issue is food stamps for the poor, accounting for three-fourths of outlays forecast for $500 billion over five years,” Cuellar said. “The Senate voted to pare food stamp spending by $4.5 billion over a decade through closure of a loophole on utility costs. But the House, in a party-line vote, called for food stamp cuts of $40 billion.”
“Even though the current Farm Bill extension expired,” Peterson wrote in his Sept. 30 Capitol Update, “appropriations for programs within the bill, including food stamps and commodity-based support programs, were approved earlier in the year and won’t expire until Jan. 1, at which point the ‘dairy cliff’ will once again take center stage and action must occur in order to prevent drastic hikes to dairy products, in addition to a halt in funding for necessary agricultural programs.”
The “dairy cliff” refers to a dairy program formula that determines milk payments to farmers. If Congress takes no action, consumers could see the price of milk double, with predictions of $7.50 per gallon possible.
“The impact of the expired Farm Bill will be staggered over the next new months,” Cuellar said. “... Some programs end in December while others continue till the end of the crop year.”
Texas and U.S. ranchers, who endured the drought that began in October 2010, may see very limited disaster assistance. According to Texas AgriLife Extension Service economists, Texas lost $5.2 billion in 2011, with livestock accounting for $2.06 billion.
Since the disaster assistance in the 2008 Farm Bill expired in October 2011, the U.S. Agriculture Secretary monitored the continuing drought, and made assistance available through emergency haying and grazing on Conservation Reserve Program lands and reduced the interest rates for disaster loans.
“The 2013 House and Senate Farm Bill proposals did include retroactive authorization of disaster programs (to fiscal year 2012),” Cuellar said. “These provisions would make livestock producers eligible for assistance from disaster losses (could include hurricanes, drought, flood, etc.).”
With the partial government shutdown, even the Department of Justice is closed, Peterson said. This is significant, with the ongoing Country of Origin Labeling (COOL) court case filed against the USDA by nine groups in the U.S. District Court in Washington, D.C.
Cuellar said the negotiators from the House and Senate traditionally reconcile disagreements and craft a compromise bill.
“But analysts say the standoffs on the budget and debt limit are likely to delay consideration of the farm bill, as well as make the bill a target for cuts when budget savings are needed,” Cuellar said, and added, “... In the end, Congress could fast-track an alternative -- such as an extension of the current law for a second straight year -- if the farm bill goes off the rails or never builds enough steam to move ahead.”
He concluded, “Short term extensions are very unpopular with ag groups and a two-year extension of current law is the most likely outcome.”