WASHINGTON (Reuters) — Congress is a year overdue in writing a new U.S. farm law. New legislation could take months of further wrangling or could evolve rapidly from the current parliamentary storms over federal spending.
The farm law will expire on Oct. 1 but that in itself will not be an immediate impetus toward congressional action. The major U.S. Agriculture Department programs, including crop subsidies, crop insurance and food stamps, will stay in operation beyond next week.
U.S. lawmakers, who perennially delay action until deadlines loom, are more likely to regard Jan. 1, 2014, as a significant deadline. That is when dairy subsidies would revert to sky-high levels dictated by an underlying 1949 law, and milk prices in the supermarket could double.
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Analysts see four possible outcomes for farm bill negotiations: legislative success, budgetary cherry-picking, more temporizing, or a statutory train wreck. Any of them could occur, say analysts. The following are the possibilities:
All sides say they want House-Senate negotiations to yield a full-spectrum, five-year farm law. Although significant differences remain over crop insurance subsidies, increases in support prices and streamlining conservation programs, these are dwarfed by the food stamp battle of Senate versus House and Democrats versus Republicans.
It could take weeks for the House and Senate to complete the procedural steps that allow negotiations to begin. Staff workers usually clear the legislative underbrush so lawmakers can resolve the key issues, all of which can take a month or two, based on past farm bills.
Food stamps are the overriding issue. The Democratic-run Senate voted for $4.5 billion of cuts in minor reforms, while the Republican-controlled House called for $40 billion in cuts over 10 years that among other things would cut off benefits to an estimated 10 percent of recipients next year.
It has been an open question for months if a compromise can be written that will pass both chambers.
While the farm bill is the premier legislation for agricultural and antihunger groups, it holds minor rank in the struggle over the federal budget and the debt limit.
Analysts say it is possible the farm bill, or parts of it, could be used to satisfy targets for savings in legislation to settle either of those disputes, both of which need action in the next few weeks. Savings range from $23 billion over 10 years in the Senate bill to $53 billion proposed by the House.
If this happened, farm legislation could be attached on short notice to an omnibus bill presented for a must-pass vote and with no opportunity for lawmakers to amend its terms.
Leaders of the House and Senate Agriculture committees pursued this lightning route in 2011, when the so-called super committee tried to avoid automatic budget sequestration. They were then criticized for writing a “secret farm bill” that offered minimal reforms.
If lawmakers cannot agree on a new farm bill by the end of December, the cows will come home in the potential doubling of the price of milk in the grocery store. The price increase was called the dairy cliff a year ago when Congress faced the problem for the first time.
The dairy price increase can be finessed for a short while if the administration wishes, as it did at the start of 2013, but it cannot be avoided indefinitely.
For lawmakers, the answer could be an extension of current law, either while they put together the final parts of a new farm bill, or for a longer period — until after the fall harvest, the end of the year or even two years.
Short-term extensions are common in the rush to finish a farm bill. Before the House moved its farm bill, there were suggestions Congress might settle for a one- or two-year extension.
The farm program, created 80 years ago in the economic chaos of the Great Depression, would revert to terms of the so-called permanent farm law, written in 1949, if Congress cannot agree on a new law or an extension of the old law.
It seems an unlikely outcome, but the farm bill process already has defied expectations. The House defeated its farm bill in June — the first-ever defeat of a farm bill — and this is the first time Congress has had to carry a farm bill into a new session because it could not complete the bill within a two-year session. The 2008 law was supposed to expire in 2012.
The 1949 law was written for a long-ago era of low market prices and unending commodity surpluses, when government subsidies were a vital part of farm income. Reverting to the law would create a shambles with production controls and breathtakingly high support prices.
Reversion to the 1949 law is a worst-case scenario that has often been raised as a threat but is so onerous that Congress always has taken steps to avoid it.
