Plowed under: Federal farm bill languishing

The political debate over the so-called fiscal cliff has overshadowed another piece of legislation that could have a significant impact on farmers, consumers and the poor if it's not addressed: the farm bill.

This sweeping measure, which expired Sept. 30 and is worth about $284 billion over five years, guides most federal farm and food policies -- including subsidies for struggling farmers, food stamps and nutrition programs, conservation, international food aid and trade.

"Without action by the House of Representatives on a multiyear food, farm and jobs bill, rural communities are today being asked to shoulder additional burdens and additional uncertainty in a tough time," U.S. Agriculture Secretary Tom Vilsack said last week.

Dennis Miller, who said he quit raising steers several years ago because it didn't pay and now raises 50,000 chickens on his Perry Township farm, said failure to resolve the farm bill or the fiscal cliff would be devastating.

If the Bush tax cuts on the middle class expire, it will exacerbate a financial situation already stressed by higher fuel and feed costs, he said.

"I won't be able to get by, to expand, buy newer equipment or do anything," Miller said. "It could put us out of business."

Congress is still focused on avoiding the fiscal cliff, but there was still optimism that some action would be taken on the Food, Conservation and Energy Act, the formal name of the farm bill.

There are three scenarios: No action, an extension of the existing bill, or outright approval, possibly by attaching it to the fiscal cliff legislation.

"We're hearing that the future of the bill, whether by extension or vote on a full bill, is intrinsically linked to the whole fiscal situation," said Jay Howes, deputy secretary for regulatory and consumer affairs at the state Department of Agriculture.

Howes, and others, give the bill a 50-50 chance of passage. The reason, he said, is the $36 billion in savings included in the Senate version of the farm bill.

"That's pretty low-hanging fruit," Howes said.

Pennsylvania Farm Bureau President Carl T. Shaffer, a farmer in Columbia County, expects Congress to punt the bill into 2013 by passing a 1-year extension of current law. That's because doing nothing is unthinkable. It would automatically reset farm policy to an act signed in 1949 and cause milk subsidy payments to balloon, resulting in rising prices for consumers.

"We may think our legislators aren't the smartest people in town, but they're not that dumb," Shaffer said.

Small farmers worry

But that extension could leave many farmers strapped if it doesn't include funding for crop insurance and other programs, he said.

Caernarvon Township dairy farmer Tim Kurtz, who has relied on milk support payments and conservation grants available through the legislation, said the bill should have been adopted months ago.

"My guess is at 11:30 p.m. on the last day they'll put something in," he said.

But will it be a good bill, or a watered down, last-minute version full of holes, he asked.

"The longer (the debate) goes the more I'm concerned that it will be inadequate," he said.

Failure to pass a bill would hurt the small farmer most, said Theresa Tracey, executive director of the USDA's Farm Service Agency in Berks County. The agency administers federal farm programs.

Small farmers, who have smaller cash flows, depend on farm subsidy payments such as the Milk Income Loss Contract, which compensates dairy producers like Kurtz when domestic milk prices fall below a government-specified level, and the Direct County Cyclical Payment program, which helps farmers cover operating costs.

"We paid over $1 million to Berks producers in 2012 through this (operating costs) program," she said.

Farmers agreed to give up both programs in the pending legislation. However, they are supposed to be replaced by safety nets that would offer assurances, but cost less.

And all of this comes at a time when dairy farmers are being squeezed by high feed and energy costs, and low milk prices.