Farm Bill 2013

June 13, 2013

June 13, 2013

Hello everybody out there in farm country. This radio commentary is brought to you by  Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm  economy and prosperous rural America. Thank you.

And now for today’s commentary—

Here we are again, trying to get a farm bill passed. We have been operating under an  extension of the old bill for the last year. Since I served as Secretary of Agriculture, the  Congress has passed a new farm bill every 5 years. Although the bills have their own official  names, they are just referred to as the farm bill.

The Senate just passed their version of the farm bill this week. It probably shouldn’t be  called a farm bill. The bill proposes to spend 955 billion dollars over the next 10 years. 760  billion dollars (80%) of that bill’s money will be spent on food stamps and nutrition.

The commodity programs (programs to help farmers) will total 41 billion dollars – a little  over 4%. That’s 80% of the money for food stamps and 4% for farm programs. I think it is  important to put into perspective where the money goes. The Senate bill does cut the food stamp  spending a paltry 4 billion dollars. By contrast, the House bill, which has not been passed in the  House yet, cuts food stamps by 20 billion dollars.

When we are talking about a total of 760 billion dollars, neither of those cuts is  significant. However, if the House is able to get their bill passed, then the two bills will have to  be conferenced, and compromise will be necessary. The big fight will be over the food stamp  cut – tiny as it is.

There are other programs that are funded in the bill. Conservation will need 58 billion  dollars (about 6% of the total). Conservation will get less money because we have less acres in  our conservation reserve than we used to have. We have released some less erosive acres to  increase crop production. That makes sense.

The most significant changes in the new farm bill are in the commodity (farmer support)  programs. Direct payments will be effectively eliminated, and they should be. Crop insurance  will be given some additional money. The safety net for our principal crops will rely on crop  insurance in case of severe drought or flooding. These adjustments are good.

Although I do worry about the risk that subsidized crop insurance can distort planting  decisions. (I want farmers to make their planting decisions on the market and not on some  government program.)

To sum it up, we have a Senate bill. We don’t have a House bill yet. If we get the House  bill, they still have to put them together. My prediction is that we will get a farm bill some time  this year. However, I won’t bet the farm on it.

Until next week, I am John Block from Washington.