Farm Bill Standoff: Sharp Divisions Remain on Commodity Title (via Agri-Pulse Communications)

Efforts to find a compromise on the farm bill’s commodity title hit the equivalent of a brick wall Thursday as leaders from both the House and Senate agriculture committees appeared to be sharply divided in their respective positions.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., brought members together for a private meeting Thursday morning to discuss the House Agriculture Committee’s latest offer to bridge the two committee’s differences on the commodity title – only to reject the offer in comments made to reporters after the meeting.

Stabenow described the latest House offer as “unacceptable,” according to Reuters. Other committee members offered overwhelming support for the stand taken by the Chairwoman and her ranking member, Pat Roberts, R-Kans.

Sen. Sherrod Brown, D-Ohio, believes “the Senate bill stands for itself—this bipartisan legislation was supported by 64 U.S. Senators from both parties and should be the starting point for any negotiations with the House,” according to spokesperson Lauren Kulik. “Sen. Brown recognizes that passing a five-year farm bill may require some compromise.  He is open to modest and reasonable modifications to the Senate commodity title, but ultimately there is broad agreement in the Senate that this farm bill must include significant reforms. The House seems inflexible and bent on pushing policies that are not reform oriented and may be market distorting.”

Brown thinks the proposal the Senate submitted to the House was “fair, reasonable, and productive,” Kulik added.

Another Senate source with knowledge of the discussions said that both Democrats and Republicans present in the meeting were united in rejecting the latest House Agriculture Committee offer.

“Members were very clear that they want a farm bill and they are willing to compromise. But they are not willing to roll over now and take a bill-without any changes – especially a bill that has not even passed the full House,” explained the source who asked not to be identified in order to speak freely about the status of negotiations.

Shortly after Stabenow’s comments, the principal House Agriculture Committee negotiators issued a strongly worded response.

“When the Senate Ag Committee starts to negotiate in good faith with their House counterparts rather than through the press, we stand ready to work with them,” noted House Agriculture Committee Chairman Frank Lucas, R-Okla., and Rep. Collin Peterson, D-Minn., in a joint statement.

“Contrary to what they would have you believe, this is not a rice, peanut, and wheat issue. Rather, it’s about making sure policy is defensible to taxpayers and works for all commodities in all regions of the country.  Having made a reasonable offer, we continue to wait for a balanced offer from the Senate so we can sort out the details.”

Both sides have already taken some steps toward what they each view as a “compromise” on the most contentious parts of the commodity title and have seemingly become even more entrenched on their respective visions for a new farm safety net as part of that process.

The Senate-passed version include an Agriculture Risk Coverage (ARC) program, strongly favored by corn and soybean growers, which covers crops currently covered by the counter-cyclical payment program and costs about $29 billion. The version passed by the House Agriculture Committee, favored by rice, cotton and peanut growers, offers producers a choice between a counter-cyclical price program, called Price Loss Coverage (PLC) and a Revenue Loss Coverage (RLC), costing about $24 billion, combined. The new Stacked Income Protection Plan for cotton has not yet been discussed.

Senate Ag Committee leaders want to keep ARC, but offered to embrace a portion of the PLC in a new, yet to be determined counter-cyclical program that could add $2.6 billion to the Senate baseline for these crops without spelling out reductions elsewhere in ARC or other spending areas. The Senate offer included about $1.3 billion for rice; $950 million for wheat; and $375 million for peanuts, without determining specific payment levels for each crop, according to House and Senate sources familiar with the talks.

This option would use current counter-cyclical prices for all crops, and slightly higher levels for wheat, rice and peanuts. But the proposed Senate levels would be the equivalent to what one source described as “sprinkling target price dust” on current CCP levels, leaving them well below the House “reference” or proposed target price levels for those crops. House Agriculture Committee leaders view this option as unworkable from a safety net standpoint.

Looking at the overall Senate proposal, 90 percent of the commodity title baseline would be spent on ARC and 10 percent on counter-cyclical options, according to House sources. That’s far from the “balanced” approach advocated by Lucas and Peterson, so, on Wednesday, they offered what they viewed as more of a 50/50 alternative – essentially splitting the funds between ARC and PLC.

Some Senate sources described the House offer, which committee members roundly rejected Thursday morning as splitting the difference between the Senate and House commodity title baseline and then dividing it in half with $13 billion for ARC and $13 billion for PLC. But they also expressed concerns that the House version was $4 billion “short,” leading to concerns that additional cuts may be taken out of crop insurance to fill the gap.

House sources said the offer was closer to $14 billion for each, and acknowledged the $4 billion variance. But they described the $4 billion differences in the House and Senate versions of the commodity title as a “timing shift.” The House Agriculture Committee would not pay CCPs until after Oct. 1, resulting in $4 billion of baseline savings, while the Senate version would pay prior to the new fiscal year.

Significant differences also remain over whether program payments should be tied to current planted or historical base acres, with Senate sources concerned about the House version’s potential to distort plantings. In a shot back at those types of criticisms, Chairman Lucas has often pointed out that he supports the Renewable Fuels Standard, but that those concerned with planting distortions need only to look at the RFS as an example.

Asked during a press conference Thursday on whether or not he was concerned about the commodity title provisions leading to planting distortions, Agriculture Secretary Tom Vilsack declined to respond, while noting that negotiators should “continue working 24/7” until they complete a new five-year farm bill.

With all of the wrangling over the commodity title, House and Senate Ag Committee leaders have yet to discuss compromises on any of the other titles of the farm bill, including the nutrition title, where wide differences in funding remain.

The Senate version of the farm bill proposes $4.49 billion in cuts to the nutrition program over the course of ten years, while the House Agriculture Committee’s version proposes $16 billion in cuts. Just last week, Senate Agriculture Committee Chairwoman Debbie Stabenow said that cuts beyond those proposed in the Senate bill “are something I am willing to talk about.”

However, both House and Senate sources said that, if President Barack Obama and House Speaker John Boehner are able to reach a deal before year-end on the so-called fiscal cliff issues and include the farm bill as part of that package, the two leaders would likely determine the final nutrition number. Both men met at the White House Thursday night for the third time, providing no clear indication that progress has been made on any of the fiscal cliff issues.

“It’s not an issue at our level,” emphasized a Senate source familiar with the discussions.

Despite the heightened tensions between House and Senate negotiators on the commodity title, sources on both sides expressed optimism that they could ultimately pull a compromise package on the entire farm bill rather quickly – in part because staff members have already run hundreds of potential options and understand the likely outcomes.

“Sometimes it’s darkest before the dawn,” noted a Senate source.

This article can be accessed via www.Agri-Pulse.com

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