Back in the Saddle

There has been a series of Senate farm bill articles over the past weeks, and we’re going to do our best to give them their due. Now is the time to wade into the wonkishness, read the tea leaves, and generally try to understand the disparate bits of news that trickled out of the Senate Ag Committee last week. The basic, underlying point: nobody has any clue how the Senate farm bill process will turn out. None. And don’t believe anyone who tells you different. But there are some clear points of conflict developing, and here are three in no particular order:

1. Chairman Harkin’s farm bill priorities are coming into conflict with those of a few other Ag Committee members, primarily Sen. Kent Conrad (D-ND) and Sen. Saxby Chambliss (R-GA):

The new U.S. farm law should guarantee disaster aid to ranchers and growers and not meddle with the current system of crop subsidies, in the view of some Senate Agriculture Committee members, aides said on Friday.

Those are somewhat different priorities than presented by the committee chairman, Tom Harkin, Iowa Democrat. Harkin has suggested that grain, cotton and soybean subsidies be refashioned to protect farmer revenue to a degree. (Full Aricle Here)

In terms of fundamentally restructuring farm program Harkin is interested in a revenue insurance program to replace current countercyclical programs. Earlier in the process, Harkin badly wanted to take some money from the direct payment program (which pays out regardless of price or production) for other priorities, but he has apparently concluded that is politically impossible.

Just as important, Harkin’s draft commodity title includes a payment limit cap of $250,000; it is very similar to the Dorgan-Grassley payment limit proposals. Sen. Conrad has repeatedly stated he is working on an alternative commodity title proposal with Sen. Chambliss, and it will probably not include payment limits similar to Dorgan-Grassley or Harkin’s draft.

2. The other big fight is over- what else?- money. Harkin needs to find quite a bit of new dollars to finance his priorities. Right now, it appears that the main source will be tax measures from the finance committee, led by Sen. Baucus (D-MT) and Sen. Grassley (R-IA). Supposedly they will find up to $10 billion in new dollars for the farm bill, but $5 billion of that will be earmarked by the Finance Committee for a permanent disaster title, the top priority of Sen. Baucus. Additionally, Harkin is rumored to have found somewhere in the neighborhood of $6 billion in offsets within the current farm bill that can be used for new funding. That’s a lot in offsets, and we’d be interested to see where it’s coming from (our guess is at least $2 billion is from crop insurance, similar to the House bill).

3. Timing: This is anyone’s guess. Originally Harkin thought the Senate Ag Committee would approve a farm bill the week of Sept. 17th. Then, according to Harkin, Senate leadership could not guarantee time on the floor soon following that, so he decided to put it off. Leadership then said they won’t schedule floor time until Harkin passes a farm bill out of committee. Most recent is that the 17th may happen after all. Whatever.

In general, we’re increasingly paranoid that serious talk of a 1 or 2 year farm bill extension will begin to take hold, and we’ll be right back at square one in the entire farm bill process.

Tomorrow we’ll wade through a few more points, and stick in some political analysis.

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