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Changes Coming on Capitol Hill

The nation made it clear in last November's election that status quo cannot continue. But when it comes to farm policy, farmers would like to see more of the same out of the next farm policy while the rest of the public will bring an ever increasing skepticism to federal spending.

With the change in House majority to Republicans, Rep. Frank Lucas of Oklahoma will now chair the agriculture committee. As chair, Lucas says he will not address the 2012 Farm Bill immediately, saying the fiscal mood in Washington will be better in 2012. Lucas says there will be fewer dollars to work with but pledges he will work hard to protect the interests of farmers as the farm bill is developed in either 2011 or 2012.

He's been very critical of the growing power of the Environmental Protection Agency (EPA). In a statement he states, "It is imperative we prevent the Environmental Protection Agency (EPA) from imposing standards which would cripple American agriculture and stifle economic growth in rural communities."

He's also a strong supporter of free trade, and has called for the implementation of three pending free trade agreements with Korea, Panama and Colombia. Interestingly Rep. Collin Peterson, the now ranking member of the House Agriculture Committee, never voted in favor of a free trade agreement in all his years in Congress.

Stabenow takes over Senate

U.S. Senator Debbie Stabenow was next in line to receive the Senate Agriculture Committee Chairmanship, and her colleagues gave her the nod November 19 to take over the crucial position likely to be part of the writing of the next farm bill.

Stabenow, of Michigan, has served on the agriculture committees in the Michigan legislature, U.S. House of Representatives and currently the U.S. Senate. 

During the last farm bill she authored the Specialty Crops title, the first ever fruit and vegetable title included. Her push for additional funding beyond traditional crops could grow in the next debate, especially as she will be the head.

This committee is top-heavy with former chairmen (Sens. Tom Harkin, Patrick Leahy, Dick Lugar and Thad Cochran), one former House Agriculture Committee chairman (Pat Roberts who also has been named the new ranking member), and one former USDA secretary (Mike Johanns). Stabenow will lead the way, but she will have plenty of others around her to guide her in the years ahead.

Stabenow gave her first major speech as the new chairwoman at the Michigan Agri-Business Association’s annual Winter Conference. In her talks she states that she plans to hold hearings yet this year on shaping the next farm bill. "I've already heard requests that programs be made simpler and easier to understand. There have also been a lot of changes to the crop insurance program that we will want to evaluate," she told attendees.

In her speech she adds, "I am fully committed to a strong safety net. There is no question that we have serious budget pressures, and so we will need to find creative solutions to help our growers manage risk. The safety net might look a little different than it does now, but we can't have family businesses going under because of a few days of bad weather."

The issues

A number of programs will expire at the end of this farm bill in 2012 including programs in conservation, energy, trade, research, and specialty crops.

While Republicans regained control of the U.S. House of Representatives and Democrats held onto the majority in the Senate, the new agricultural committees in each chamber aren't likely to touch farm subsidy programs, says Otto Doering, a farm policy specialist at Purdue University. There's even a good chance both committees will abandon attempts by Peterson to eliminate direct payments, he says.

"Congressman Peterson's desire is to back off direct payments and, instead, strengthen counter-cyclical payments to make agricultural subsidies more reasonable and fair to the public," Doering says. "I think that's dead meat at this point as farm groups rally again to preserve the direct payment, particularly in this time of high commodity prices."

Federal spending on farm income subsidies is about $20 billion per year. Farmers are receiving the payments this year despite enjoying high prices for corn, soybeans and wheat. Even with high land rental rates, fertilizer and equipment prices, farmers can make a living with current crop prices, Doering says.

"The Republican House leadership indicates it will keep the direct payments fully intact even when prices are high," he says. "However, recognize that one of the leaders of the tea party movement is Dick Armey of Texas, a former whip for the Republican House under Newt Gingrich. There is nothing on earth that Armey hates more than agricultural subsidies. So we may see change."

Now as for the other big ticket items for agriculture. Doering predicts political and ideological differences between the divided House and Senate will stall movement on climate change issues, trade policy and economic stimulus legislation.

Tax issues, such as the estate tax and capital gains tax likely will be one of the first items addressed - possibly in the lame duck or within the first days after Congress arrives in January. The Bush tax cuts expire at the end of 2010. Some media reports indicate President Obama may be willing to expand the tax cuts for two years as the nation struggles to get back on its feet.