T-Minus 11 Days

September 19, 2007

This much we know for certain: A new farm bill will not be signed into law by the time the clock runs out on the current farm bill in 11 days.  And what happens next has caused tremendous confusion.

Technically, the farm bills of 1938 and 1949 would kick in because these are the most recent permanent farm laws—modern-day farm bills are not permanent laws and require reauthorization every five or six years.

But Congress is unlikely to let farm policy travel back in time because the ’38 and ‘49 policies are radically different than current law and the economic impact to rural America would be disastrous.

In a recent report to legislators, the Congressional Research Service (CRS) pointed out that there is a little wiggle room beyond the Sept. 30 cutoff, as legislation technically does not need to be in place until early summer when harvest starts on 2008 crops.

“Using past farm bills as a guide, few have been enacted before the end of the fiscal year,” CRS noted.  The 1981 and 1985 farm bills were enacted in late December, the 1990 farm bill was signed in late November, and the 1995 farm bill didn’t take effect until April 1996.

However, farmers and their financial lenders get more nervous with every day that passes after the deadline.  This is especially true for winter wheat farmers who have the nation’s first harvest of the year and are currently planting crops without any certainty about the farm safety net.

“When the 2002 Farm Bill expires on Sept. 30, authority for most existing farm programs will terminate, including authority for advanced direct payments,” John Thaemert, the president of the National Association of Wheat Growers (NAWG), wrote in a letter [view letter] to the Senate Agriculture and Appropriations Committees. “USDA officials have indicated to us that the Department does not intend to request extension of authority to provide these advanced direct payments or other programs under the 2002 law.”

Thaemert, who is a banker as well as a farmer, went on to write, “Similarly, a number of bankers who serve our grower-members have called our office to inquire about the safety net, and we have no answer to give them.”

Even though wheat producers would be the first to lose their safety net, they are not the only growers troubled by the lethargic pace of this year’s farm bill process.

Sugar producers from Louisiana passed a resolution on Aug. 29 calling on swift Senate action and pointed out their support of the farm bill passed by the House of Representatives in July.  That resolution reads:

The 2002 farm bill is set to expire for most crops at the end of September.  For America’s sugar producers, the January 2008 opening of the sweetener market with Mexico will require some essential changes to the farm safety net before the end of the calendar year.  For these reasons, the sugarcane growers and processors in Louisiana, who provide nearly $2 billion in annual economic benefits to the State, are resolved that:

The U.S. House of Representatives has approved a farm bill with commodity, energy, trade and other titles with broad support within the agricultural community, including all major components of the Louisiana agricultural industry, and

Those provisions were unanimously approved by the Committee on Agriculture prior to House passage,

The growers and processors represented by the American Sugar Cane League urge Louisiana’s Senators to support the House-passed bill as the basis for prompt Senate action to improve the farm safety net and they urge the entire delegation to support the farm bill on final passage and, if necessary, on a veto-override vote.

No date has been set for farm bill consideration by the Senate Agriculture Committee, although most Washington insiders expect the Senate to debate the farm bill before the end of October 2007.