Late last year, Congress was unable to pass a new five-year renewal Farm Bill, but a short term Farm Bill fix was recently approved. On January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 to avert the "fiscal cliff," and on January 2, 2013 President Obama signed the Act into law (Public Law No: 112-240). The "fiscal cliff" deal was primarily enacted to avoid automatic tax hikes and spending cuts, but it also included provisions extending portions of the 2008 Farm Bill for nine months through September 30, 2013. Agriculture Committee leaders negotiated the Farm Bill extension which included current farm subsidy programs, including the milk program in its current form.
Although the temporary suspension gives some farmers a reprieve for the short term, long-term plans are on hold until a more permanent solution is put in place. Congress has until the next fiscal year to come up with a five-year extension, which gives legislators until October 1st and the clock has started ticking.
Last week, Senate Majority Leader Harry Reid (D-NV) demonstrated his commitment to working on a new five-year Farm Bill by reintroducing last sessions Senate Farm Bill in the new 113th Congress (S 10 – Text has not yet been received from GPO). Last session, the Senate Farm Bill passed with bipartisan support. In his statement, Majority Leader Reid indicated that the Farm Bill is on his top priority list, and he called on the Senate to pass the legislation quickly.
Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) supported Reid’s move stating, "Majority Leader Reid has demonstrated that the Senate will once again make supporting our nation’s agriculture economy while cutting spending a top priority." Senator Stabenow indicated she is committed to convening for markup as soon as possible.
Last session, the Congressional Budget Office estimated that the Senate Farm Bill cut agricultural spending by approximately $25 billion over 10 years, while the House version pushed for more cuts and found approximately $35 billion in savings. Both bills called for the elimination of a farm subsidy of direct payments to farmers, but to maintain a social safety net for farmers both bills also increased support for other types of subsidies, such as government sponsored crop insurance. The major issue to be addressed in the Farm Bill is the Food Stamp Program which is the biggest driver of Farm Bill spending. Both the Senate and House bills called for modest cuts to food stamps.
As of this writing it remains unclear what Speaker of the House John Boehner (R-OH) and his caucus plan to do. We will continue to monitor and report on substantive developments surrounding the Farm Bill as it progresses through the legislative process.