Senate ag leaders release
chairman’s mark of the 2012 farm bill

Taking the next major step in developing the 2012 farm bill, Senate
Agriculture Committee Chair Debbie Stabenow (D., Mich.) and ranking member Pat
Roberts (R., Kan.) released their draft of the legislation last Friday. Markup
is scheduled to begin Wednesday.

In releasing her summary of the draft, Stabenow said the bill would reform
farm policy, consolidate and streamline a number of programs and reduce the
deficit by $23 billion.

“This bill saves taxpayers money while strengthening initiatives that help
farmers, ranchers and small business owners create American jobs,” the
chairwoman’s summary stated.

Among the most notable features of the draft was the elimination of direct
payments. Many farm policy watchers have long presumed that the 2012 farm bill
would move away from traditional subsidy programs toward more
risk-management-oriented alternatives, including crop insurance.

“They make it clear they are looking at a risk management system that helps
producers stay in business,” observed Dale Moore, deputy director of public
policy at the American Farm Bureau Federation. “We are not surprised they are
eliminating direct payments.”

Moore said having options in the farm safety net and risk management toolbox
is important to farmers. Stabenow and Roberts said their draft of the bill
would, in addition to eliminating direct payments, consolidate two remaining
safety net programs into one while strengthening crop insurance and expanding
access.

Initial analysis of the draft suggests that $15 billion – more than half – of
the bill’s budget savings come from the commodity title of the bill. That said,
a crop insurance program that is quickly becoming the cornerstone of the federal
farm safety net is no longer fiscally small enough to be overlooked or
ignored.

“Since 1990, crop insurance has grown quite a bit,” said Carl Zulauf, Ohio
State University agricultural economist. “We’ve gone from roughly 100 million
acres in the early 1990s to more than 250 million today, and at the same time
net payments continue to grow. In 1990, it was less than a half a billion
dollars in net payments; in the 2011 crop year, payments will be around $5.5
billion-5.6 billion, and 2011 will be the first time net payments from crop
insurance have exceeded direct payments.”

Another central component of the bill for farmers and ranchers is the
conservation title. The committee print of the bill would end “duplicative
programs,” consolidating 23 existing conservation programs into just 13, while
maintaining the existing tools farmers and landowners need to protect and
conserve land, water and wildlife.

The National Association of Conservation Districts (NACD) said it was pleased
the Senate Agriculture Committee leaders recognized the value of conservation in
supporting the nation’s long-term environmental and economic stability. NACD
said the language in the Title II framework demonstrates strong bipartisan
support for locally-led conservation efforts. The proposal calls for a 10% cut —
about $6 billion — over 10 years to Title II farm bill programs.

Following the House Agriculture Committee’s move to trim
$33 billion from the Supplemental Nutrition Assistance Program (SNAP) last
week, the farm bill’s nutrition programs could be a source of controversy in
the writing of the 2012 bill. The Senate committee draft addressed issues with
the nutrition program mainly by strengthening accountability provisions.

“At a time when many out-of-work Americans are in need for the first time in
their lives, it is critical that every taxpayer dollar be spent responsibly and
serves those truly struggling,” the chairwoman’s summary concluded. “By closing
loopholes, tightening standards, and requiring greater transparency, the
proposal increases efficiency and improves effectiveness.”

Specific proposals to tighten accountability in the SNAP program include:

- Stopping lottery winners from continuing to receive assistance.

- Ending misuse by college students.

- Cracking down on retailers and recipients engaged in benefit
trafficking.

- Increasing requirements to prevent liquor and tobacco stores from becoming
retailers.

- Eliminating gaps in standards that result in overpayment of benefits.

A report last week from the Congressional Budget Office (CBO) found that SNAP
program participation set a record for participation in fiscal year 2011,
with one in seven Americans receiving benefits. “On average, 45 million people
received SNAP benefits each month in fiscal year 2011, which represents a 70%
increase over the roughly 26 million people (or one of every 11) who received
benefits in 2007. Outlays for SNAP benefits (not including administrative costs)
more than doubled during that period, from about $30 billion to $72 billion,”
the CBO report says.

Farm policy organizations summarily called on members of the House and Senate
agriculture committees to complete work on the 2012 farm bill as quickly as
possible given the expiration of current legislation Sept. 30. Many analysts
predict that will be challenging in an election year with relatively few
legislative working days left.