White House Report Quantifies Farm Bill's Economic Impact

New report showcases momentum of U.S. ag industry, benefits of farm bill renewal

Published on: Nov 22, 2013

The farm bill will contribute to domestic agriculture sector, its workforce, rural American communities, and families and businesses across the country, says a new report released Thursday by the White House Rural Council.

Though not necessarily a new statement, the report containing it includes 48 pages of White House priorities for the farm bill, along with data that quantifies the size and scope of many of the sectors the bill is expected to impact.

USDA Secretary Tom Vilsack, in a press call discussing the report, said it will likely serve as "ammunition" to get the work done on a new farm bill. Legislators from the House and Senate began talks to agree on a joint version of the bill Oct. 30.

New report showcases momentum of U.S. ag industry, benefits of farm bill renewal (file photo)
New report showcases momentum of U.S. ag industry, benefits of farm bill renewal (file photo)

"This is a comprehensive and I think a compelling report that makes the argument on a multitude of levels why it's important for the rest of the country and for all of America to see Congress finish its work," Vilsack said.

The report lays out specific goals for a new farm bill, including: building on momentum of the ag industry and rising farm income; contributing rural communities and infrastructure; supporting the bioeconomy; protecting nutrition assistance; developing a farm safety net; enhancing conservation and clean energy; promoting markets at home and abroad; and promoting research.

Vilsack, who together with the Obama administration has previously outlined each of the goals during previous calls to action, touted the health of the ag sector as a linchpin in the call for a new bill.

"This report documents that there's a direct relationship between the agricultural economy and the rest of the economy," Vilsack said, noting that nearly 5% of GDP is tied in some way to what happens on the farm.

Additionally, the report points out that when adjusting for inflation, net farm income stands at its second-highest level since 1973, at $120 billion for 2013. Farm assets, too, are expected to rise 7.1% in 2013, as farmland values stay strong.

In documenting improvements the bill could provide, the report goes on to note that bill investments could address the needs of rural areas stricken by poverty. Projects to improve schools, libraries and hospitals in rural areas are also contained in the bill.

Moving on to farm policy, the report addressed reforms to the federal crop insurance program, touting changes to direct payments and additions that will assist farmers and ranchers in mitigating losses in the event of a disaster like the 2012 drought and the early season blizzard last October.

The report concludes with an ultimatum of sorts – one that Vilsack has long warned could be in the cards if a new farm bill is not passed.

"Failure to pass a new Farm Bill before January 1, 2014, raises concerns that provisions of so-called “permanent law” would resume," the report says, triggering an estimated support level for dairy at more than $38 per hundredweight.

At this level, the report warns that not only would consumers eventually experience nearly a doubling in price of milk, domestic demand for dairy products would fall by an estimated 9% and exports would likely disappear.

With a tightening timeline as the holiday season draws near, Vilsack said the warnings in the report should serve as a reminder of the penalties to pay, should a bill not be agreed to.

"The key here is to focus on getting the job done and understanding that there is a consequence if the job doesn't get done, Vilsack said, adding, "Congress acts best and acts most expeditiously when there are timelines."

For more on Vilsack's outlook for the 2013 Farm Bill, click here. And, read the complete White House report, The Economic Importance of Passing a Comprehensive Food, Farm and Jobs Bill.