Wed 19 Sep, 2012 09:03 am
So What Happens If The Farm Bill Expires? Not Much, Right Away
September 19, 2012
by Julie Rovner - NPR Morning Edition
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.