How Government Shutdown Affects Farmers

Iowa Farm Scene

Farm bill expired Oct. 1, same day government shut down.

Published on: October 2, 2013

Dozens of programs administered by USDA will end if a new bill isn't passed or if there isn't an extension of the 2008 farm bill. Several food aid, rural development and other ag programs are among those now being hit. USDA will be forced to cut back its efforts to promote American agriculture abroad, and USDA won't be able to enroll acreage in the Conservation Reserve Program—if the shutdown continues.

The more pressing farm bill deadline will come on January 1

"Although the farm bill expired October 1, it's unlikely to spur Congress to complete a new farm bill," says Northey. Widely used programs such as food stamps, subsidy payments and crop insurance all remain in place. The deadline that looms huge is January 1, 2014 when a 1949 farm law requires subsidy prices to begin to increase, starting with dairy products. It could double the price consumers pay for milk to $7 a gallon. Wheat and other farm commodities would be affected sometime later in 2014.

The failure of Congress to pass a farm bill before the deadline isn't uncommon. The last three farm bills—1996, 2002 and most recently 2007—were finished and passed a year later than expected. The 2008 farm bill expired once previously, on October 1, 2012. Congress finally passed an extension early this year. White House and Congressional leaders have said they won't be willing to support another extension of the 2008 farm bill. That puts pressure on congressional leaders to do something.

A long-term delay in getting a new farm bill passed would revert back to a 1949 law. U.S. Ag Secretary Tom Vilsack says the farm bill doesn't have as much priority in Congress as it should. He says USDA is preparing for the 1949 law to kick in, and will be seeking ideas and input from people on how they think it would be best to do that. Meanwhile, Congress is expected to hold meetings this month to make another attempt to write and pass a final 5-year, $500 billion farm bill.