BOISE • A last-minute deal to extend the 2008 farm bill by nine months has left many Idaho producers both disappointed and frustrated.
Travis Jones, executive director of the Idaho Grain Producers Association, called the short-term extension disappointing but not surprising given how divided the 112th Congress was. The extension is bittersweet for Idaho growers because the organization had hoped first for a new five-year bill and then for a long-term extension.
After the Senate overwhelmingly passed a farm bill in June, producers were hopeful that the new farm bill could be completed before the 2008 farm bill expired on Sept. 30. But House leadership refused to bring the bill to the floor even after the elections.
The Senate-passed version of the bill would have cut ag spending by about $23 billion over the next 10 years; the House Ag Committee version would have cut $35 billion. Many in farm country had hoped those savings would entice lawmakers to include the farm bill in any effort to avoid the so-called fiscal cliff. Instead, extending the current bill by 9 months will cost $986 million, Jones said.
Bob Naerebout, executive director of the Idaho Dairymen’s Association, said the extension won’t impact Idaho dairies because it does not include the dairy program reforms the industry had sought — including a revenue assurance program. Instead, the MILC program (Milk Income Loss Contract) was extended. Given that milk futures prices seem to be stabilizing around $18 to $19 per hundredweight — a price level that allows producers to pay their bills — he doesn’t think MILC will come into effect in 2013, unless feed costs rise sharply higher.
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Direct payments, a subsidy made to farmers whether they grow a crop or not, was one of the major sticking points during the 2012 farm bill negotiations. Many farmers in northern grain-producing states agreed the $5 billion-per-year subsidy could end, but growers in southern states lobbied hard for it to remain. The extension ensures the subsidy will continue for at least one more year.
Though the extension was disappointing, there was some good news. The estate tax was made permanent. The rate was increased from 35 to 40 percent, but a married couple can exempt up to $10 million of assets.
“It’s nice to have that become permanent law,” Jones said, “instead of extending it and extending it and extending it. That was a nice part of the fiscal cliff package for farmers.”
Another bonus was reauthorization of the Foreign Market Development and Market Access Programs. Both trade programs had expired at the end of September.
Jones called the reauthorization a lifesaver for Idaho barley and wheat growers since half the grain produced each year is exported.
The sugar program, which operates at no cost to taxpayers, was also apparently continued in the extension. The Coalition for Sugar Reform has already vowed to continue its efforts to open up the U.S. sugar market to more imports in the 113th Congress. That effort had been turned back by the Senate last year.
“Now we’ll have to fight that all over again,” said Mark Duffin, executive director for the Idaho Sugarbeet Growers Association.
Although it is not uncommon for a farm bill to expire before a new bill is enacted, it is rare for a bill to be passed on to a new Congress. Both the Senate and House agriculture committees must start the process of writing a bill from scratch and holding committee hearings on the proposals again.
Grain, dairy and sugar producers are all preparing to fight many of the battles they already fought in 2012. One overriding concern is how the Congressional Budget Office will score agricultural programs between now and March, and how much money will be available for farm programs should Congress decide to take up the farm bill in 2013.
While Naerebout and Jones both say they expect the Senate and House ag committees to begin work on a 2013 bill, neither is willing to predict when work will begin or if the full House and Senate would agree to hear any bill coming out of committee.
“It’s a new Congress and a new budget and new committee members,” Jones said. Sen. Thad Cochran, R-Miss., will become the new ranking member of the Senate Agricultural Committee, an appointment that is sure to rekindle the conflict over direct payments.
Dairy producers are already putting together a list of priorities for a new farm bill.
“If we are going to have a farm bill with a dairy provision, it’s time to get going on it and make it valuable,” Naerebout said. “It is very disappointing that for all the work that went into the farm bill, the House didn’t hear it.”