Mike's Blog

Insights from the President of ProAg

A “Hurry Up and Wait” Situation…

by Mike Connealy on 12.18.2013

Mike's Blog Hurry Up and Wait Farm Bill OrdealOn Friday, the 13th of December, the US House of Representatives threw in the towel and essentially called it “good enough” for 2013. The House did pass a 30 day extension of the current Farm Bill. The US Senate leadership has indicated that this extension is meaningless and will not be taken up. So, it would appear that we will have a continued period of time in January that we are in limbo, with no real Farm Bill in place. 

Skeptics have called this version of Congress a “do-nothing” bunch. Those of us interested in a 2013 Farm Bill will have to wait until January of 2014, at the earliest, to see if this Congress can actually pass a Farm Bill that President Obama will sign. We have seen little reason for optimism, but maybe the tide will turn in 2014.

In a bit of a surprise, the House did pass a budget that ended the sequester and established “regular order” for spending. This appears to be an effort by the House leadership to show that indeed they can compromise with the Senate and move an actual bill. This would be a strong hint that perhaps a Farm Bill could also be moved.

The Farm Bill conference committee leadership has conducted many sessions behind closed doors trying to iron out differences.  Just as a reminder, the leadership is made up of Democratic Senator Debbie Stabenow of Michigan, Republican Senator Thad Cochran of Mississippi, House Republican member Frank Lucas of Oklahoma, and Democrat Collin Peterson of Minnesota. These four have been busy trying to hammer out a framework for a final Farm Bill that they can bring to the full conference committee for debate and vote. The goal is to have a “conference report” that resolves all the Farm Bill issues and can be voted up or down by the Senate and the House – then signed by the President.

The big issues that are said to be decided – at least among the leadership – include SNAP (food stamps), spending, and commodity title. The House cut SNAP $4 billion a year and the Senate was in the $400 million a year vicinity.  My guess is that this will end up with less than $1 billion a year for a final number – meaning the Senate is largely prevailing. The Twitter-verse is filled with rumors that $800 million is the “framework” number. Like the budget deal, this indicates that the House Republicans are perhaps going to be satisfied with “baby steps” in spending issues. 

The loss of direct payments is a foregone conclusion in this Farm Bill. The real question has been for Congress to determine how to salvage some of these $$ within the commodity title.  It would appear that something called AMP (adverse market prices) will surface as the preferred method by the conference leadership. There will be a spirited debate in the conference committee about base acres and also target prices, but don’t bet the farm on how this ends up.

Crop insurance, in my opinion, escapes largely unscathed in the final product.  We are guessing that we will have a tie for conservation-compliance in order to receive premium subsidy. We are also thinking that we will not see a means test for adjusted gross income (AGI) in the final version.  This could be hotly contested in the conference committee and AGI – if missing in this Farm Bill – will certainly be dragged out early in the next Farm Bill cycle.
So, we again have a “hurry up and wait” situation for ending this Farm Bill ordeal. Rather than worrying about it, I’m convinced that we should enjoy the holiday season and look forward to the 2014 year with optimism. The spring sales season will soon be upon us, so let’s get to work doing the best we can for our farmer customers that rely upon a strong private sector crop insurance program. 

Questions or comments are always welcome and a Merry Christmas to all!



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