Transcript Federal Budgets and the 2007 Farm Bill

Stephen Frerichs
February 2013
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Election did not significantly change politics
or players
One change in Agriculture Committee
leadership – Senator Cochran ranking
member instead of Senator Roberts
American Taxpayer Relief Act of 2012
extended farm bill through crop/fiscal year
2013
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March 1 – Sequester kicks in
March ? – President releases budget
March 27 – Continuing Resolution expires
April 15 – Congressional budget deadline
May 19 – Debt ceiling reached
Farm Bill -- ???
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A result of 2011 Budget Agreement to raise the debt
ceiling
Applies to most Federal Programs with some
exceptions including Social Security, Medicaid,
Medicare and food stamps
Roughly a 7.3% reduction in defense and 5.2%
reduction in non-defense spending
Applies to DCP, ACRE, Conservation programs
except CRP and existing contracts
Does not impact crop insurance
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The pain of the sequester results in Congress
pursuing a global budget agreement to cut
spending
Congressional Budget due in April is an
opportunity to reach an agreement to cut
spending
The possible debt ceiling breach in May acts
as an additional incentive to reach an
agreement
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Chairwoman Stabenow and Chairman Lucas
are saying they will wait on the farm bill until
budget picture becomes clearer
Farm bill or significant parts of a farm bill
could be part of a deficit reduction package in
the context of raising the debt ceiling/ or
voiding the sequester
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112th Congress failed to complete farm bill
Election did not significantly change politics
or leaders
Farm bill completion as a stand-alone bill
unlikely without some clarity on budget cuts,
especially regarding food stamps
Supplemental Nutrition Assistance Program
(food stamps) cut and dairy policy remain key
sticking points.
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If completed in 2013, farm bill policy will
likely be very similar to Senate passed
and House Agriculture Committee
reported bills.
If completed in context of deficit
reduction, cut could be larger than
Senate passed $23 billion.
Commodity policy will include some
version of higher target prices
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Past is prologue
Committees do not anticipate holding many, if any,
hearing before going into a mark-up
 Neither Committee is likely to want to change
much, if anything
 With Senator Cochran as new ranking member,
Senate Agriculture Committee will be forced to
change its commodity title somewhat to better
accommodate southern commodities
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$ in billions
FY 2013 – 2022 Total
Percent of Total
Total
$994.6
Nutrition
$771.8
78%
Crop Insurance
$89.8
9%
Conservation
$65.2
7%
Commodity Programs
$62.9
6%
All Other
$4.9
0%
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House
Senate
Commodity Title
-$23.6 billion
-19.4 billion
Conservation
-$6.1 billion
-$6.4 billion
Nutrition
-$16.1 billion
-$4 billion
Research
$546 million
$681million
Energy
$0 million
$780 million
Specialty Crops
$428 million
$359 million
Crop Insurance
$9.5 billion
$5.0 billion
Total
-$35.1 billion
-$23.1 billion
10 Year Savings, CBO Scoring of Senate Bill and House Chairman’s Mark
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Senate Bill
House Bill
Eliminates direct, counter cyclical, ACRE programs
Continues loan programs with change for cotton to make WTO compliant
Continues Sugar Program, Reforms Dairy Program
New Agricultural Risk Coverage (ARC)
Price Loss Coverage (PLC) or Revenue
Loss Coverage (RLC)
AGI Test at $750,000 per entity
AGI Test at $950,000 per entity
$50,000 payment limit per person per
year, plus peanuts
$125,000 limit per person per year, plus
peanuts
Changes “Actively Engaged” rules
No change to “Actively Engaged”
Conservation Compliance Applies
Wheat, corn, grain sorghum, barley, oats, long grain rice, medium grain rice, pulse
crops, soybeans, other oilseeds, and peanuts. Note cotton is not a covered
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commodity
Reference Price
Wheat
Rice
Corn
Oats
Barley
Sorghum
Cotton
Peanuts
Soybeans
Other Oilseeds
Dry Peas
Lentils
Small Chickpeas
Large Chickpeas
Unit 2008 Farm Bill
$/bu
$/cwt
$/bu
$/bu
$/bu
$/bu
$/lb
$/ton
$/bu
$/cwt
$/cwt
$/cwt
$/cwt
$/cwt
4.17
10.50
2.63
1.79
2.63
2.63
.7125
495
6.00
12.68
8.32
12.81
10.36
12.81
2012 House
Committee Bill
5.50
14.00
3.70
2.40
4.95
3.95
n/a
535
8.40
20.15
11.00
19.97
19.04
21.54
Percent Change
31.9%
33.3%
40.7%
34.1%
88.2%
50.2%
n/a
8.1%
40.0%
58.9%
32.2%
55.9%
83.8%
68.1%
The barley reference price for the 2008 Farm Bill used the USDA Feed Barley Price. The 2012 House13
Committee bill uses the USDA all-barley price.
Senate Bill
House Bill
Creates new Supplemental Coverage Option (SCO)
Creates new Stacked Income Protection for Cotton (STAX)
Creates new Peanut Revenue Insurance Coverage
Nationwide Sod-saver provision
Prairie-Pothole Sod-saver provision
Plug 70% 2013 and subsequent
Plug 70% anytime
Conservation Compliance Attached
No Conservation Compliance
AGI test, 15% point less subsidy if AGI
exceeds 750,000
No AGI test
Separate irrigated – non-irrigated
coverage at EU
Separate irrigated – non-irrigated
coverage at all unit levels
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House
Senate
SCO
$3.998 billion
$3.001 billion
Yield Plug at 70%
$1.127 billion
$.855 billion
STAX
$3.851 billion
$3.224 billion
Interaction Effect
-$.639 billion
-$2.469 billion
Coverage Level by Practice
$.672 billion
$.506 billion
Specialty Crop A&O
$.205 billion
$0
Total
$9.524 billion
$5.036 billion
10 Year Savings, CBO Scoring of Senate Bill and House Chairman’s Mark
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Area (county) coverage wrapped around
individual coverage to cover deductible
Pays based on relationship between county
yield guarantee and actual county yield
Underlying individual coverage impacts
payment
County must have 10% loss
If enrolled in ARC, 21% deductible; not
available if enrolled in STAX or RLC
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Cotton only
Additional area coverage either as standalone or on top of individual coverage
Up to 30% coverage or amount of deductible
of individual policy, whichever is less
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Senate Bill
House Bill
Reduce CRP to 25 million acres by 2017 from 32 million current level
Wildlife Habitat program with Environmental Quality Incentives Program
Creates one Easement Program with two legs – Agricultural Land Easements and
Wetland Reserve Program Easements
Create new Regional Partnership Program
Limit CSP enrollment to 10.4 million
acres annually
Limit CSP enrollment to 9 million acres
annually
Fund EQIP at $1.455 B in FY13, $1.645 B
in FY14 and $1.65 B in FY15
Fund EQIP at $1.75 billion annually
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Democrats
Republicans
Stabenow (MI)
Cochran (MS)
Leahy (VT))
Roberts (KS)
Harkin (IA)
Chambliss (GA)
Baucus (MT)
McConnell (KY)
Brown (OH)
Johanns (NE)
Casey (PA)
Boozman (AR)
Klobuchar (MN)
Grassley (IA)
Bennet (CO)
Thune (SD)
Gillibrand (NY)
Hoeven (ND)
Donnelly (IN)
Heitkamp (ND)
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Frank Lucas (OK)
Bob Goodlatte (VA)
Scott DesJarlais (TN)
Steve King (IA)
Chris Gibson (NY)
Randy Neugebauer (TX)
Vicky Hartzler (MO)
Mike Rogers (AL)
Reid Ribble (WI)
Mike Conaway (TX)
Christy Noem (SD)
Glenn Thompson (PA)
Dan Benishek (MI)
Bob Gibbs (OH)
Chris Collins (NY)
Austin Scott (GA)
Rodney Davis (IL)
Scott Tipton (CO)
Jeff Denham (CA)
Steve Southerland (FL)
Richard Hudson (NC)
Rick Crawford (AR)
Doug LaMalfa (CA)
Martha Roby (AL)
Ted Yoho (FL)
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Collin Peterson (MN)
Mike McIntyre (NC)
Filemon Vela (TX)
David Scott (GA)
Michelle Lujan Grisham (NM)
Jim Costa (CA)
Ann Kuster (NH)
Tim Walz (MN)
Richard Nolan (MN)
Kurt Schrader (OR)
Pete Gallego (TX)
Marcia Fudge (OH)
William Enyart (IL)
Jim McGovern (MA)
Juan Vargas (CA)
Suzan DelBene (WA)
Cheri Bustos (IL)
Gloria McLeod (CA)
Sean Patrick Maloney (NY)
Joe Courtney (CT
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