Congress returned to session last week with the Farm Bill top of mind and high on its agenda. Thus far in 2013, the series of financial crises that have warranted the attention of Congress and the administration - sequestration, continuing appropriations for FY 2013, the debt ceiling - have pushed back until now the Agriculture Committees' consideration of the Farm Bill. The Senate Agriculture Committee announced last Wednesday that it will conduct markup of its bill on Tuesday, May 14, and the House Agriculture Committee has scheduled its markup for May 15. Senate Majority Leader Harry Reid (D-NV) has stated publicly that the Senate will conduct debate and votes on the Farm Bill in May and House Majority Leader Eric Cantor (R-VA) said on May 10 that the Farm Bill will be brought to the floor sometime during the summer.
The end of the 112th Congress was a tumultuous time for the Farm Bill. The 2008 bill expired on Sept. 30, 2012, without extension or reauthorization. Despite its expiration, the lights did not go out at USDA and most programs continued due to funding that went beyond Sept. 30. However, many feared severe disruption to the industry if Congress did not act by Jan. 1, 2013, at which time funding for the Milk Income Loss Contract (MILC) program would end.
Prompted to act before the start of the new year to avoid the so-called "dairy cliff," House and Senate Agriculture Committee leaders submitted to leadership in both chambers a template for including Farm Bill reauthorization in the deal being struck to avoid the "fiscal cliff" - the fiscal crisis created by the simultaneous expiration of the Bush-era tax cuts and across-the board cuts to the federal budget known as "sequestration." When that deal passed on Jan. 2, 2013, it included a one-year (actually, just until the end of FY2013) extension of the 2008 Farm Bill programs that expired on Sept. 30, 2012. The extension did not include programs whose funding had expired prior to that date.
So, the 113th Congress began with the same Farm Bill challenges facing them as when the 112th ended. The most contentious policy items are dairy, the farm safety net, and cuts to the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. In addition, there are challenges relating to animal welfare, the level of savings each bill will achieve, and potential cuts to crop insurance. None of these issues have been ironed out completely, although there have been some altered proposals from key legislators and farm organizations.
The new dairy provisions, nearly identical in both the House and Senate bills, would usher in new margin-protection programs to replace current price-protection programs. The proposed bills would establish the Dairy Producer Margin Protection Program (DPMPP) to replace the MILC program, the Dairy Product Price Support Program and the Dairy Export Incentive Program. It would also create the Dairy Market Stabilization Program (DMSP), a voluntary program that would set a production threshold which, once triggered, would withhold payments to producers for a portion of the milk they ship that is above their individual production base. The latter is sometimes referred to as supply management.
These new programs stem from the Dairy Security Act, authored by House Agriculture Committee Ranking Member Collin Peterson (D-MN), and backed by the National Milk Producers Federation (National Milk). Its provisions were included in both the House and Senate Farm Bills and were likely a key reason the Farm Bill was not reauthorized last year. No small factor is the opposition that House Speaker John Boehner (R-OH) has repeatedly verbalized - he refers to the market stabilization portion as "Soviet-style." The International Dairy Foods Association - the primary opponent of the market stabilization provision - and National Milk have shown no signs of wavering from their respective stances and we are likely to see the same provisions in the bills released by the House and Senate in the coming days.