Farm Bill Politics May Impede Passage of Livestock Disaster Bill

Posted November 2, 2012 at 12:00am

As powerful as the storm called Sandy proved to be, it may not be forceful enough to push a stand-alone disaster bill for the livestock industry through Congress.

A House disaster aid bill intended to cover losses livestock producers incurred during this year’s drought is pending before the Senate. Majority Leader Harry Reid, D-Nev., has steered clear of the legislation at the urging of Agriculture Chairwoman Debbie Stabenow, D-Mich., who said in July that if her chamber acted on the measure, the House would feel less pressure to act on its farm bill.

Groups opposed to the measure, which the House passed just before leaving for the summer recess, appear firm in their objections to what they see as a piecemeal response to the worst U.S. drought since 1956. They continue to advocate for passage of a five-year farm bill that would reauthorize expired disaster programs and expand coverage.

“Let’s figure out a way to get that done. We wouldn’t be supportive of a stand-alone disaster bill,” said Jon Doggett, a lobbyist for the National Corn Growers Association.

The House’s drought relief bill would provide aid only to eligible ranchers with losses in fiscal 2012.

The Senate passed its farm bill (S 3240) in June, but the House has not voted on the House Agriculture Committee-approved bill because of differences within the Republican caucus over spending reductions for the Supplemental Nutrition Assistance Program (SNAP).

Supporters of the drought legislation may find it difficult to hitch a ride if Congress decides there is a need for a disaster aid bill to cover areas hit hard by the recent storm’s wind and rain. Millions were left without electricity and there has been widespread structural damage, mostly from flooding, in New York and New Jersey.

The Federal Emergency Management Agency says it believes the $3.6 billion in its disaster fund should be enough. However, House appropriator Chaka Fattah, a Pennsylvania Democrat, plans to file legislation for $12 billion in supplemental spending for FEMA in the postelection session that starts Nov. 13. But Fattah said he will not seek budget offsets, which would make the bill a non-starter in the Republican-controlled chamber.

Early reports indicate relatively little damage to farming and livestock and poultry operations, although many New Jersey livestock producers were without the power they need to provide well water for their animals. Because it is late fall, most crops have been harvested, and hogs, poultry and dairy herds were largely kept in shelter.

In other words, Sandy may not have caused enough damage to cause farm groups to rally behind a disaster aid bill or an expansion of the House drought bill to address the storm’s damage.

Caught up in the farm bill strategies and politics, the House disaster bill does not seem to have much traction in Congress.

Agricultural Considerations

A stand-alone drought bill might have had more support if farmers who produce major commodity crops such as corn and soybeans were not already largely shielded from economic losses from the drought. But even with their support, selling even a limited aid bill might be difficult because reduced corn and soybean supplies have raised prices paid to farmers who were able to harvest crops. The Agriculture Department also forecasts record farm income for 2012.

Many Midwestern farmers have another economic cushion in land values that have risen along with market prices for their crops, said Mike Duffy, an agricultural economist at Iowa State University, who found that in his home state, farmland values rose 32.5 percent last year. The last time prices rose by that much was in the 1970s, Duffy said.

Broadly speaking, congressional support for farmer and rancher aid seems to have started cooling several years ago when lawmakers began tightening conditions for assistance, said Bradley Lubben, a University of Nebraska-Lincoln extension public policy specialist.

In 2008, farm bill writers authorized disaster programs for uninsured commodity crops, tree farms and livestock to reduce the need for stand-alone legislation, he said. Those programs expired in 2011, a year before the rest of the 2008 farm bill (PL 110-246) and the start of the 2012 drought. The early expiration kept the legislation within budget but left those farmers and ranchers without a federal backstop.

“The livestock folks are suffering doubly,” Lubben said. “They lost livestock production and capacity as well, and there were forage losses that traditionally are not fully insurable. They didn’t have that same crop insurance portfolio working for them.”

Lubben said the need for aid exists but that Congress appears to have little appetite for ad hoc spending in a time of big budget deficits.

Since the impasse this summer between the House and Senate over drought aid, Lubben said, livestock ranchers have had to move on and make decisions about their operations. They have made use of the Agriculture Department’s release of acres from the environmental Conservation Reserve Program for forage. They have thinned herds, sending animals to slaughter earlier. They have scaled back their production plans. Others have gotten out of the business all together.

“Having disaster payments that cover one, two or three months of feed costs is somewhat irrelevant, at least irrelevant to the production plan because that plan is in place. It eventually could help with cash flow, but it is after the fact,” Lubben said.