Farm Bill Stalemate On Hold For Now

Many ag groups weigh in on last ditch effort to pass a Farm Bill, warning that there's work yet to be done

Published on: Jan 3, 2013

At the late-night news of a nine-month farm bill extension and two-month fiscal cliff deal, many farm groups filed mixed reactions. Some offered support for action on the long-stalled Farm Bill, while others showed increased concern for action on a five-year deal before the next deadline expires.

The farm bill extension, which was voted on and passed in both the Senate and House Tuesday, includes few provisions that were re-worked in the proposed 2012 Farm Bill, and rather extends 2008 policy that expired in September. The bill was included in a package to avoid the expiration of a series of tax cuts that many dubbed the "fiscal cliff."

Perhaps USDA Secretary Tom Vilsack summed up the sentiment of many: "I am pleased that Congress passed needed middle class tax relief," he said in statement Wednesday. "However, while I am relieved that the agreement reached prevents a spike in the price of dairy and other commodities, I am disappointed Congress has been unable to pass a multi-year reauthorization of the Food, Farm and Jobs bill."

Some say yea, others say nay: Fiscal cliff, Farm Bill deal met with criticism, concern.
Some say yea, others say nay: Fiscal cliff, Farm Bill deal met with criticism, concern.

Groups say it's got its flaws, but…

After the vote, a common theme among farm groups, as with Secretary Vilsack, was the glaring lack of disaster relief, continuation of direct payments, old milk policy and no funding for many USDA programs.

American Farm Bureau Federation President Bob Stallman said the Farm Bill extension was little more than a "stop-gap measure," expressing disappointment that Congress was unable to achieve passage of a five-year bill.

"Now, it will be up to the new 113th Congress to put a new farm bill in place," Stallman said in a statement Wednesday, "and we will continue to insist on the kind of reforms that were included in the proposals approved by the Senate and the House Agriculture Committee during the 112th Congress."~~~PAGE_BREAK_HERE~~~

Other farm groups expressed similar sentiments. National Farmers Union President Roger Johnson was harsh in his criticism, saying the extension was a "short-sighted, temporary fix."

"The legislation that passed fails to provide disaster aid for farmers or necessary support for our dairy industry, yet continues unjustifiable direct payments," Johnson said in a statement Tuesday. "Farmers, ranchers, rural communities and all Americans deserve better and would have been better served with a new five-year farm bill." 

…it also has some benefits

Though there were provisions that will be missed with an extension, not all comments were scathing. Some groups praised the benefits of the bill – a continuation of the biodiesel tax credit and relief from looming tax hikes.

The impending hikes were of special concern for many farmers and ranchers with ownership of large tracts of land. Assorted farm groups pushed for estate tax reform to avoid the hikes, but will now settle with a compromise.

Proposed estate tax rate increases included a $4 million per couple exemption and maximum taxable rate topping out at 55%, but as part of the new deal, estates will be taxed at a top rate of 40% with the first $5 million in value exempted for individual estates and $10 million in value for couples.

"The new estate tax rules give greater certainty to thousands of family-owned businesses in the produce industry," said Robert Guenther, senior vice president of public policy for produce group United Fresh. "If Congress had not acted, much higher estate taxes would have gone into effect. The confidence this move allows many business owners is definitely a victory in the bill."

American Soybean Association President Danny Murphy said simply that the proposed rates, had they gone into effect, were unrealistic for family farms.

Murphy noted that the new policy provides "much more viable framework for the land-based and capital-intensive nature of family farms." He said also that the solution allows farmers to more easily pass their operations from generation to generation.

Murphy, along with biodiesel groups, praised the portion of the fiscal cliff deal that provided an extension of the biodiesel tax credit, a $1-per-gallon incentive to produce biodiesel.

Murphy said the credit extension, which is effective in 2013 and retroactive to 2012, was a "big win" for soybean farmers. Anne Steckel, vice president of federal affairs with the National Biodiesel Board, said the move will improve job creation and expand production.~~~PAGE_BREAK_HERE~~~

"It's been a long year with a lot of missed opportunity and lost jobs in the biodiesel industry. But we're pleased that Congress has finally approved an extension so that we can get production back on track," she said.

Some groups dissatisfied overall

Despite the "take some, leave some" attitudes that many groups adopted regarding the extension or fiscal cliff tie-in, some groups roundly opposed the entire bill.

Calling it a "disaster," the Center for Rural Affairs, a rural advocacy group, chastised the bill for its lack of funding for rural programs such as the Conservation Stewardship Program and the Beginning Farmers and Ranchers Program.

"The message is clear – despite high market prices, virtually unlimited commodity and crop insurance premium subsidies to mega farms remain uncapped, but beginning farmers and rural communities are left twisting in the wind," said CRA Executive Director Chuck Hassebrook. "And conservation of our precious land and water gets put on hold."

Though milk policy received the lion's share of media attention recently, and many report that it was the final straw that spurred action on the Farm Bill, Jerry Kozak, President of the National Milk Producers Federation, said the outcome wasn't ideal.

"We need to spend the coming months figuring out how to move farm policy forward. The status quo is not an acceptable outcome, either for farmers or taxpayers," He said, adding that his group will resolve to move policy forward by advocating for the Dairy Security Act.

The new measure, which the group championed, provided a voluntary insurance program to milk producers, and a dairy "supply management" program that eliminated direct payments and export subsidies. It was included in the 2012 Farm Bill – but obviously not in the extension.

"The renewal of current programs doesn't offer dairy farmers a meaningful safety net," Kozak warned, vowing to push the proposed policy into the next Congress.

Will nine months be enough?

That next Congress, which convenes at noon on Thursday, will be faced with many remnants of 2012, not just dairy policy. And, at the stroke of noon, the clock begins to tick for new, permanent farm policy.

Overall, despite some hard feelings among farm groups and overall uneasiness, Secretary Vilsack said he looks forward to continuing the push for a five-year bill.

"While I am relieved that the agreement reached prevents a spike in the price of dairy and other commodities, I am disappointed Congress has been unable to pass a multi-year reauthorization of the Food, Farm and Jobs bill to give rural America the long-term certainty they need and deserve," Vilsack said, promising improved safety nets for consumers and expanded economic opportunities for rural America.