Both the Senate and House Agriculture Committees gave approval last week to their respective versions of a five-year farm bill, setting the stage for a vote in the full Senate and House on the measures soon.
Lawmakers want to get a food and farm program package in place before the current extension of the old farm policy package expires in September.
The Senate Agriculture, Nutrition & Forestry Committee voted its version of the five-year bill out of committee with a bipartisan margin of 15-5 on May 14.
A strong conservation title, with a national "sodsaver" provision, was included in the Senate bill. The bill includes the re-coupling of conservation compliance to crop insurance, a move supported by leading conservation and farm organizations.
The Congressional Budget Office estimated that the Senate farm bill would save $18 billion over the next 10 years or $24.4 billion if sequestration were repealed.
National Farmers Union (NFU) President Roger Johnson said he was "very pleased that the farm bill has passed out of the Senate Agriculture Committee. Farmers and ranchers deserve long-term certainty and this is a step in the right direction."
Johnson said he was encouraged to see that the Senate bill includes $800 million in mandatory funding for the energy title and that conservation compliance requirements were linked to crop insurance.
"I am glad that a short-sighted amendment that would eliminate Country-of-Origin Labeling (COOL) for livestock and poultry was withdrawn. NFU has long supported COOL and agree with the millions of consumers who demand to know the origins of their food."
The Federal Agriculture Reform and Risk Management (FARRM) Act of 2013 passed out of the House Agriculture Committee on Wednesday night (May 15) on a vote of 36-10.
The House version includes an estimated $39.6 billion in cuts, including the elimination of direct payments and more than $20 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP).
As Chair Frank Lucas (R-OK) had promised, it also consolidates 23 conservation programs into 13, with estimated savings of $6 billion. The full House is expected to begin debate next month on the measure.
If Lucas and Ranking Member Collin Peterson (D-MN) have their way, the bill should pass the House in June so differences between their version and the Senate version can be worked out in July through what is called a conference committee.
That would pave the way for a new farm policy package to be in place by September when the current extension expires.
Senators were already scheduled to debate their version of the farm bill this week.
Bob Stallman, president of the American Farm Bureau Federation said the movement on the two bills is great reason for optimism that there will be a new long-term farm bill this year.
"That belief is further supported by the fact that the bills are more striking in their similarities than in their differences," he said. "The emphasis on crop insurance as a risk management tool, combined with flexibility that the measures offer through other safety net choices, will go a long way in ensuring a stable agricultural economy over the next few years."
House Agriculture Committee Chair Lucas said that "farmers, ranchers, and American taxpayers are counting on us to pass a farm bill. No other committee in Congress is voluntarily cutting money, in a bipartisan way, from its jurisdiction to reduce the size and scope of the federal government."
Wisconsin Farm Bureau Federation President Jim Holte said he shared Stallman's optimism about Congress getting a farm bill done this year. "Their approval of similar versions of a new farm bill is a very promising sign that we will finally see meaningful farm policy reform in 2013."
Holte said the farm bill proposals provide the" right amount of flexibility and certainty as our farmers make decisions that impact the fiscal health of their businesses and our local economies."
Throughout this farm bill process the Wisconsin Farm Bureau has supported placing an emphasis on crop insurance as a responsible risk management tool and the elimination of direct payments to farmers, he said. "We are pleased to see bipartisan agreement on this commonsense fiscal and risk-management strategy."
Holte said the Dairy Security Act, which was included in both committee versions, remains the "most significant dairy reform package in a generation" and shows that Congress is ready to "take bold steps to move away from antiquated policies of the past and replace them with a program that meets the needs of the modern dairy industry."
Wisconsin Farm Bureau has been a supporter of the voluntary margin insurance program and the dairy market stabilization program.
If the latter, called by some the supply management program, were removed, Holte said the margin insurance program would need to be modified to place more responsibility on individual dairy farmers to manage their own risk.
"To do this, we believe premium costs have to be increased and the level of coverage has to be lowered so dairy farmers respond to the market, not the government.
"If some method for controlling the federal government's program costs is not included then the farm bill would merely be creating another government program that interferes with the marketplace. If this were to happen, dairy farmers would not be responding to market conditions but rather a government program that artificially keeps prices low with a constant oversupply of milk," he said.
Both the House and Senate committees chose to include the provisions of the Dairy Security Act (DSA) in their farm bill packages. The House Agriculture Committee rejected the Goodlatte-Scott amendment that would have eliminated the supply management portion of the plan.
That is the same result as last year when the Senate passed its version of the farm bill in June and the House Agriculture Committee passed its version in July and both included DSA provisions in their dairy titles. That bill stalled when House leadership refused to allow the measure to come up for a vote.
(An extension of the old farm bill was passed in January to keep some of the current farm programs going.)
Jerry Kozak, president and CEO of the National Milk Producers Federation, said he was pleased that once again lawmakers on the agriculture committees saw fit to support the DSA provision in a new farm bill.
The Goodlatte-Scott amendment would have "undermined" the farm bill's dairy safety net, he said, and thousands of dairy farmers across the country who support the DSA are pleased with the results.
"The DSA provides the best combination of effective risk management for dairy farmers, while minimizing farm program costs to the taxpayer," he said, and the provisions represent reforms that dairy farmers have "labored for four years" to develop.
"The House committee has now twice rejected the Goodlatte-Scott effort to undermine establishment of a workable national dairy policy," Kozak said.
"As the farm bill moves to the House floor, we hope that the committee's decision will be the final word on the matter. It is time for dairy processors to end their campaign of divisiveness, and assist us in moving the farm bill toward completion.
"The dairy industry needs the stability that the DSA will provide, and we need it now."
DAIRY FREEDOM ACT
The dairy titles of both bills now match but opponents of the supply management program still hope to change that.
Many Wisconsin dairy farmers were energized when they learned that Congress has decided to take on the farm bill again, said Wisconsin Farmers Union President Darin Von Ruden.
That excitement quickly stalled, he said, when news came out that an amendment regarding dairy policy entitled the Dairy Freedom Act (DFA) has gained support from some members of Wisconsin's House delegation. It is the Goodlatte-Scott proposal.
The DFA would allow farmers to voluntarily enroll in a risk management program without any market stabilization provisions that are intended to protect dairy farmers from the risks inherent in chronic overproduction.
"Removing the market stabilization component of the dairy reform package will exacerbate wild swings in market prices and lead to chronic over-supply," Von Ruden said. "This would be devastating for farmers who produce milk."
Von Ruden quoted a recent study released by University of Missouri agricultural economist Scott Brown that compared the DFA to its alternative, the Dairy Security Act (DSA), which contains the market stabilization provision.
The study found that under both programs, farmer revenues would increase. However, the study also found that market prices for milk increased on average by 6 cents per hundredweight under DSA and declined on average by 19 cents per hundredweight, under the DFA, Von Ruden said.
The additional cost to taxpayers under the DFA, however, would be substantial, the study concluded, as farmers would be receiving more money for their milk from taxpayers and less from the marketplace.
Von Ruden was troubled by the conclusions of the study. "Farmers want to get a decent price from the market, not from the mailbox. If farm incomes are approximately the same but market prices are much lower under DFA, then the difference is being made up by taxpayers. Let's have honest markets, and let consumers pay for milk at the grocery store, not through higher federal taxes."
Earlier this month, five members of the U.S. House of Representatives from Wisconsin sent a letter supporting the DFA to members of the House Committee on Agriculture, but the House Agriculture Committee declined to incorporate the DFA into its Farm Bill proposal.
"We applaud the House Agriculture Committee for leaving the Market Stabilization provision of the Dairy Security Act intact, and we hope that all members of Congress will do the same, after considering all the facts," said Von Ruden.
Though the provision was rejected in the House Agriculture Committee, it could be introduced as an amendment to the farm bill on the House floor.
Though everyone calls them "farm bills" the measures that passed both agriculture committees and now face debate in the respective houses of Congress are mostly "food" programs.
Eighty percent of funding in a farm bill goes towards Supplemental Nutrition Assistance Programs (SNAP) - feeding programs for the disadvantaged. Disagreement over how much to cut food stamps last year was the main reason no farm bill was passed.
The House wanted larger cuts than the Senate had passed in its version last year.
While some Republicans note that the economy is improving and food program cuts should be achievable, others in the House disagree.
The House version of the farm bill cuts food stamps by $20 billion.