Time for concerted farm bill action
BakingBusiness.com, Oct. 1, 2013
by Morton Sosland
Little alarm has been heard from any sector of grain-based foods, much less from America’s agricultural and food production system, about the expiration at midnight September 30 of the farm law in effect since 2008. The expiration, absent even the year-long extension adopted a year ago when the law expired in 2012, marks one of the few times in the 80 years of federal agricultural supports that Congress has allowed the basic act to expire. The lack of concern or even interest may be ascribed to the likelihood that something will be done before obsolete farm programs written for another era and authorized by “permanent law” begin to be phased in after December 31.

Once viewed as a paradigm of bi-partisanship where legislation specifically aimed at helping agricultural producers won the backing of urban members of Congress united behind the bill by its inclusion of domestic food programs, the act’s renewal this year stumbled mainly on how best to reduce spending. Hardly anything has proved more divisive along party lines than efforts of the Republican majority controlling the House to eliminate food stamps and nutrition programs from the act, and then seeking to slash spending on food relief. So far as farm programs themselves are concerned, cost-cutting was the focus of both parties in the House and Senate, striving for elimination of direct payments unrelated to markets or farmers’ incomes as well as cutting outlays on other programs considered unneeded in a time of relative farm prosperity.

If anything assures a farm bill will eventually be passed, it is the ultimate consequence of inaction by the end of this year. That would result in the revival of agricultural programs that have not operated in decades and that require price supports for basic commodities like wheat at stunningly high levels. In the case of wheat, the so-called “permanent law” requires the government to offer non-recourse loans to farmers, once marketing quotas are proclaimed and approved by farmers, at 75 per cent of parity, which is slightly above $14 per bushel. If quotas are voted down, the loan rate would be 50 per cent of parity, or around $9.35 per bushel. With wheat prices this crop year forecast in a range of $6.50 to $7.50 and the suspended farm bill offering a loan rate of $2.94, the impact of returning to parity-related prices is such a nightmare that no one expects it.

Many other provisions, some important to grain-based foods and others pertinent to various parts of the food industry, are in abeyance until decisions are made on a new act, not just an extension. Disaster assistance, conservation programs, specialty and organic crops research and certification, bioenergy and rural development are just a few of the programs once considered important that now have expired. Many of these were set for revival in five-year proposals before Congress.

It was in his column appearing in the September 17 issue of this magazine that Robbin S. Johnson, a contributing editor and a fellow of the Hubert H. Humphrey Institute of Public Affairs, raised an issue concerning this matter that deserves the attention of grain-based foods and all other parts of the food industry. Mr. Johnson, an astute observer of the Washington scene, warned that agricultural programs are being shaped by their critics on all sides of the political spectrum rather than by the people who ought to be directly involved. “The commercial sector,” he wrote, “lacks a shared vision of what to seek.” With the agricultural system under attack from many quarters, Mr. Johnson warned, “Unless a more thoughtful response from the commercial food system is developed, future policy decisions are going to be imposed on it rather than crafted to sustain and improve it.”

Little imagination is needed to grasp what Mr. Johnson says. His is a warning that uninvolvement will leave the food industry exposed. The time is at hand for speaking out for the entire food industry as well as the national interest.