2012 Farm Bill: Anticipated Policy Changes and How They May Affect the Ag Community

The world population has reached 7 billion and is expected to increase by another third by the end of the century. So it comes as no surprise that planning for adequate food supply is critical however, the very policy in place to help ensure America’s food production system is efficient and effective is now under the microscope. The 2008 Farm Bill, which is renewed roughly every five years, is now up for reevaluation.

Leaders of the House and Senate Agriculture Committees sent a bipartisan letter to the Joint Select Committee on Deficit Reduction, also known as the Super Committee, indicating that they will support a $23 billion reduction in the agriculture budget over 10 years in exchange for an opportunity to provide recommendations on how to achieve the budget cut. They have until November 23 to devise a deficit-reduction plan that Congress will then vote on without amendments.

According to an article in AgWeek, the guiding factor in writing the bill is how to maintain viable programs with such a large budget cut. And the biggest challenge is writing a program that fits across all geographic areas. In the article, Sen. Charles Grassley, R-Iowa, divided up the cuts as follows: $15 billion from the commodity title and $4 billion each from conservation and nutrition.

In the article Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., said, “U.S. farm policy should be based on risk management and only help farmers when they are in distress, facing events such as natural disasters or sudden drops in price. I am confident that this bipartisan effort, while difficult, will result in a vastly different and far more cost effective way to protect our nation’s food supply.”

Farm subsidies estimated at $10.2 billion this year are especially vulnerable to cutting after the U.S. Department of Agriculture forecast record farm profits of $103.6 billion. Lawmakers from both parties expect the subsidies will account for the bulk of the cuts in USDA spending.  According to Grassley, crop insurance support at $8-9 billion a year (currently one of the most expensive parts of the Farm Bill), will likely not be cut. Staffers are trying to write a crop program that will protect farmers from shallow losses and disasters while encouraging them to maintain current levels of crop insurance.

Last week, in Agriculture Secretary Tom Vilsack’s speech at the John Deere Des Moines Works, he spoke about the three core principles that have helped shape the success of American agriculture, including maintaining a strong safety net for farmers when natural disaster or an unpredictable price collapse strikes. He stressed that the changes in the next farm bill must not compromise protection of production, must work for all kinds of farms and must be simple and understandable. Strengthening the safety net will also encourage younger generations to begin farming as the aging farming population begins to retire.

At TISCO, we understand what the new farm bill means to the ag community and we will monitor any new developments closely and provide updates. For up-to-date information, visit Understanding the Farm Bill: A Citizen’s Guide to a Better Food System’s Facebook page.

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