Congress faces ag. deadline

U.S. Farm Bill would trigger 1949 prices

Michelle Monroe

By Michelle Monroe

Staff Writer

Just
The Facts

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We’ve already seen one year with inaction.

- Tom Vilsack, ag. secretary

ST. ALBANS — Lawmakers have until the end of the year to pass a new Farm Bill or a law originally passed in 1949 will take effect, dramatically raising milk prices for consumers.

This is the exact same situation Americans faced last year when the House Agriculture Committee passed a Farm Bill that Republican leaders refused to bring to the floor for a vote. Only a one year extension of the previous Farm Bill arranged by Sen. Patrick Leahy, D-Vt., made it possible to avoid the impact of the 1949 law, commonly referred to as permanent law.

Under permanent law, the government must intervene to raise the level of crops and milk to “parity,” which is defined as the purchasing power of those crops in 1910-1914.  A year ago, the parity price of milk, according to the Congressional Research Service, would have been $49.70 per hundredweight (cwt), more than double the price farmers are currently receiving.

Given the threat of permanent law, Congress must act in the view of Secretary of Agriculture Tom Vilsack. “This isn’t a situation where you have a choice,” he said in a conference call with reporters. “We’ve already seen one year with inaction.”

“The key here is to focus on getting the job done and understanding there is a consequence for not getting the job done,” he said.

The Farm Bill is a massive, five-year bill authorizing numerous programs administered by the U.S. Dept. of Agriculture from crop insurance, to loans for infrastructure and economic development in rural areas, to conservation and nutrition programs. It was up for renewal in 2012, but all that could be accomplished was the single year extension.

The Senate passed a Farm Bill months ago. That bill included a $4 billion cut to the nation’s largest nutrition program, the Supplemental Nutrition Assistance Program (SNAP), previously referred as the food stamp program.

After representatives rejected a Farm Bill approved by the House Agriculture Committee, the House passed a Farm Bill without SNAP benefits. It then passed a separate bill cutting $40 billion from the SNAP program, and adding new requirements for recipients such as drug testing.

However, only eight percent of SNAP recipients are able-bodied adults without children. There are already work requirements for recipients, unless they are disabled or elderly, Vilsack pointed out.

Every dollar spent on SNAP benefits generates $1.79 in economic activity according to the USDA’s Economic Research Service.

During the recession, the federal government increased SNAP spending. That increase expired on Nov. 1, reducing the benefits a family of four in Vermont receives to $91 per week.

The bill then went to a conference committee made up of representatives from both chambers. Staff for the conferees have been working through the differences in the two bills, but have not yet reached the areas of greatest difference, explained staff for Leahy, a conferee.

Meanwhile, the Obama administration has released a report on the importance of agriculture to the American economy from the Council of Economic Advisers.

Vilsack pointed out the agriculture is nearly 5 percent of the nation’s gross domestic product (GDP) and creates one out of every 12 jobs.

Agricultural exports support roughly one million jobs.

A Farm Bill would create opportunities to increase exports and expand local and regional food systems, said Vilsack.

“We all take food production in this country for granted and we should not,” said Vilsack. National programs, such as crop insurance mitigate the risks of farming, making it possible for people to farm, he suggested.

Extending the existing Farm Bill for a year or two is an option for Congress, but Vilsack noted that option comes with a cost. The Senate bill reduced spending. Some of that savings came from replacing the current dairy programs with a variation on crop insurance that would insure farmers against a large drop in milk prices or a large increase in feed prices, and a voluntary supply management program intended to eliminate the large swings in milk prices that devastated farmers in 2006 and 2009.

Vilsack also pointed to the importance of energy and conservation programs authorized by the farm bill. Conservation programs authorized by the Farm Bill have reduced soil erosion by 40 percent in the U.S. and are used by 500,000 landowners. The Rural Energy Assistance Program has supported 9,166 energy projects that collectively generate 9 million megawatts of electricity, said Vilsack.

Congress still has time to pass a farm bill and avoid the imposition of permanent law. “At the end of the day, if there’s a will, there’s a way,” said Vilsack.

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