Budget for Next Farm Bill is Going to Be Tight

Budget for Next Farm Bill is Going to Be Tight

Key ag policymakers told a Farm Foundation forum earlier this week that there is precious little budget room to do much tinkering with the next farm bill.

Chief House Agriculture Committee economist Craig Jagger told ag lobbyists, journalists and others in Washington, the main funding source for the 2012 farm bill will be taking from one program to fund another, there will be no new dollars and likely fewer.

"The Federal Budget has significant short-run and long-run problems and significant pressure for all committees to reduce spending," Jagger said. "Budget reconciliation is on the horizon and as budget rules have been tightened opportunities to add extra funding beyond baseline funds have diminished."  

As of the last Congressional Budget Office baseline estimate in March there was just $6.4 billion a year for commodity programs, about 80% of that for direct payments. Crop insurance was also pared about $6 billion through renegotiations and some 38 programs, worth $9 billion have no established funding after 2012.

"If we authorize these programs the funding needs to come from other ag programs or non-ag sources," Jagger said. "In reality we can all think of some of those programs that don't need to be continued, but someone certainly thinks they do." 

Pat Westhoff, of the University of Missouri-Columbia's Food and Agricultural Policy Research Institute, says as higher crop prices since 2007 have reduced marketing loans and countercyclical payments, those higher prices have run up crop insurance premiums and government subsidies.

"With crop insurance becoming the largest share of total Federal spending now, that means we could actually have a situation where higher prices translate into more government spending on agriculture, not less," Westhoff said. 

Ferd Hoefner with the Sustainable Ag Coalition argued that in the present budget climate, it will take more political effort than ever before to write a farm bill.

"It's going to really take coalition building above and beyond anything we've seen before, and we've seen a lot of coalition building around the farm bill," Hoefner said. "In this fiscal climate it is just going to take everybody working extra hard on that score." 

Former Texas Congressman and House Ag member Charlie Stenholm says several government reports on dealing with the deficit have all listed cuts to farm spending as a top recommendation.

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