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House Sets Up Three Options to Extend Farm Programs

The Congressional Budget Office estimates it would cost $986 million to renew and extend the 2008 farm law for the rest of fiscal 2013, according to a document issued Sunday night.

House leaders have posted such an extension, along with two one-month bills — all unnumbered — and members could consider any one of them as early as Monday.

The longer-term extension also includes nearly $850 million in disaster aid, and would fund a series of expired programs by trimming projected spending on direct payments by $1.3 billion over 10 years.

The CBO said that direct payments scheduled to be issued in October — the start of fiscal 2014 — would be trimmed to 82.5 percent of costs and account for a savings of $146 million in outlays.

The extension through the remainder of fiscal 2013 also would include several “orphan” programs that were in the 2008 farm bill (PL 110-246) but which lost their mandatory funding.

Leaders may be testing the political waters by floating the options to see which one could garner the votes to pass. All three would put on hold a return to 1949 permanent law, delaying the so-called dairy cliff that is set to occur Jan. 1. If Congress does not extend 2008 law or address the issue in some way, the cost of dairy price supports would double, raising the possibility that milk prices eventually could increase to $8 a gallon.

“Clearly, it is no longer possible to enact a five-year farm bill in this Congress,” House Agriculture Chairman Frank D. Lucas, R-Okla., said in a statement. “Given this reality, the responsible thing to do — and the course of action I have long encouraged if a five-year bill was not possible — is to extend the 2008 legislation for one year. This provides certainty to our producers and critical disaster assistance to those affected by record drought conditions.”

The one-year version actually would run through the remaining nine months of fiscal 2013 and represents an agreement among the House and Senate farm bill writers, according to Debbie Stabenow, chairwoman of the Senate Agriculture Committee.

She said that measure would include an extension of the direct payment program in the 2008 law.

Until now, Stabenow, D-Mich., has steadfastly opposed an extension of current law, pressing instead for enactment of a new, five-year measure that would change the direction of agriculture support programs. But as the year draws to a close, Stabenow says it has become clear that her goal will not be reached in time to avoid the impending disruptions to the dairy market that would occur if 1949 law goes into effect.

“If a new Farm Bill is not passed in the next few days, Agriculture Committee leaders in both chambers and both parties have developed a responsible short-term Farm Bill extension that not only stops milk prices from spiking, but also prevents eventual damage to our entire agriculture economy,” she said in a written statement.

“If a new Farm Bill doesn’t pass this Congress we’ll soon hold another markup and just keep working until one is enacted next year,” she added.

The one-year option would include a version of the dairy insurance and stabilization programs in the House and Senate farm bills (HR 6083, S 3240). The International Dairy Foods Association has fought the stabilization program as a supply control device to prop up milk prices by encouraging farmers to reduce milk production to avoid price-depressing surpluses.

House Speaker John A. Boehner, who has had little to say publicly about the farm bill, has also criticized the new dairy programs.

Defenders such as Stabenow and Collin C. Peterson of Minnesota, the ranking Democrat on the House Agriculture Committee, say past dairy programs have provided inadequate financial protection to dairy farmers, and the insurance program coupled with the stabilization plan would create a strong safety net.

On Sunday, Peterson said he backed the longer extension because it includes the new dairy programs.

“Given House Republican leaders’ repeated opposition to a five-year farm bill, House and Senate Agriculture Committee leadership has worked together to write an extension of the 2008 farm bill which includes much-needed reforms to the dairy industry,” he said.

Peterson called the proposals for one-month extensions “a poor joke on farmers that offers no certainty, just more empty promises from the Republican leadership.”

One of the shorter-term bills would extend current farm programs with some exceptions and the other is a one-month extension of current dairy programs.

“The legislation posted is the result of discussions with ranking member Peterson and my colleagues in the Senate,” Lucas said. “It is not perfect — no compromise ever is — but it is my sincere hope that it will pass the House and Senate and be signed by the president by Jan. 1.”

The one-year extension would also renew and extend agriculture disaster assistance programs that expired on Sept. 30, 2011, a year before most of the 2008 farm bill did.

Ferd Hoefner, policy director for the National Sustainable Agriculture Coalition, found the CBO report reassuring although he said he still has questions about the extension’s treatment of two programs.

“While we question the way the bill was drafted, we are delighted it provides 2013 funding for beginning farmers, rural development, minority farmer outreach, specialty crop and organic research, direct farmer to consumer markets, and a variety of other programs,” Hoefner said in a statement. “We are still awaiting word as to whether the bill would also allow USDA to resume sign-ups and sign contracts with farmers for the Conservation Stewardship Program and the Conservation Reserve Program-Transition Incentive Program.”

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