Federal belt tightening and new political players are redrawing the ground rules for the 2013 farm bill, say agriculture groups who expect weaker subsidies than were offered in 2012.
“There’s less money. There’s more focus on making deeper cuts and there’s a different ranking member on the Senate Agriculture Committee and I think that’s important to understand,” said Roger Johnson, National Farmers Union president, who like others expects a leaner farm bill than lawmakers proposed in 2012.
Last year, House and Senate versions of the farm bill were touted as rare, bipartisan budget cutting measures, capable of saving taxpayers $35 billion to $23 billion over 10 years. Post sequestration, the bills are now being scrutinized for not cutting enough.
An additional $10 billion in cuts might be in the works because the Congressional Budget Office doesn’t think the spending cuts in last year’s farm bill proposals were as deep as originally thought. Consequently, new farm safety-net programs intended to protect producers from weather and market losses will likely be cut.
Earlier in this week, House Budget Chairman Rep. Paul Ryan, R-Wisc., released a new budget plan proposal calling for $31 billion in farm subsidies cuts. Ryan suggested that with strong farm revenues the past several years, cutting subsidies makes sense.
One of the programs backed by Montana farm groups was the Agriculture Risk Coverage program, a supplement to crop insurance that assured farmers their revenue for any given year wouldn’t fall below 79 percent to 89 percent of their five-year Olympic average.
That program, included in the farm bill version passed by the Senate, was proposed as a cheaper alternative to the direct payments received by farmers annually regardless of whether they plant a crop or incur weather or market losses.
Eliminating direct payments from the farm bill saved $50 billion, some of which was spent on the Agriculture Risk Coverage program and the similar Price Loss Coverage program proposed in the House.
It isn’t clear that the Congressional Budget Office is accurate in it’s assessment that more cuts are needed, said Dale Moore, American Farm Bureau Federation executive director of public policy. The CBO studies spending proposals by running them through hundreds if not thousands of scenarios and then selecting a smaller number of those scenarios to develop a probable outcome. The outcomes selected might not reflect how often the program would actually be used.
“You write farm bills for the bad years,” Moore said. “Apparently when the CBO said they’re not going to save as much, there were some down years.”
Moore said there will be deeper cuts to farm support programs. What emerges will depend on several things, including the changes made to the agriculture committees.
The Senate Agriculture Committee has a new ranking member, Sen. Thad Cochran, R-Miss., who replaces Sen. Pat Roberts, R-Kans. Roberts favored the Agriculture Risk Coverage program, while Cochran voted against it in 2012.
Both Moore and Johnson say Cochran’s new post could change whatever farm support the Senate authors this year.
U.S. Sen. Max Baucus, D-Mont., is a member of the Senate Agriculture Committee and oversaw the drafting of the 2008 farm bill. He said Thursday budget cuts will make farm bill talks challenging.
"There's no question we're facing an uphill battle, but I'm going to do everything in my power to get the best possible Farm Bill for Montana,” Baucus said. “It's going to be a tough fight, but it's one worth fighting, because one in five Montana jobs are counting on us."