WASHINGTON — A nightmarish scenario is looming for Iowa’s agriculture industry in just five weeks — an expired federal farm bill reversing policies by more than 60 years.
Government price controls. Acreage limits on private production. Penalties for farmers who exceed those limits. Mandatory higher prices for consumers for some products. No more direct payments to farmers.
In short, “it would be almost 180 degrees opposite where farm policy has been going,” said Dale Moore, a deputy executive director at the U.S. Farm Bureau in Washington and a former chief of staff to four U.S. agriculture secretaries.
“In the past 20 to 25 years there has been a lot of effort to move more toward a market-based approach to farm policy instead of government control. This would turn that past 2 1/2 decades of farm policy on its head, back in the direction of mandatory supply management.”
By Sept. 30, Congress must reauthorize the current 5-year-old farm bill or the nation’s farming system will revert to two laws — one passed in 1938 and another in 1949 — that predate most all modern policies.
However, there are some who see a silver lining in the gathering clouds. Congressional analysts as well as senior Senate Agriculture Committee members such as Democratic Sen. Tom Harkin told The Gazette that the current farm bill already covers the large majority of farm programs that are in place for the current crop year, meaning many of them won’t automatically expire until next spring or summer.
“While this is good news for Iowa farmers, it does not negate the need for the certainty that comes from enacting a new five-year bill, especially to respond to the ongoing drought in the Midwest,” Harkin said.
An exception would be dairy programs, which will expire on Dec. 31 without congressional action. But analysts also say Congress may be able to extend funding for certain programs without approving a renewal of the entire bill.
Many programs would expire outright after Sept. 30, including initiatives for agricultural research, rural development, nutrition programs, and energy development.
Disaster relief programs — especially urgent now because of this year’s drought — already expired on Sept. 30, 2011. They could be continued retroactively if the House and Senate authorize such funding, although payments may not go out to farmers until 2013.
Congress has failed before to reauthorize the farm bill, most recently in 1996 and again in 2007. The current bill was enacted a year late, in 2008. This year, tensions over the November election have largely brought both the House and Senate to a functional grinding halt.
Just before the current monthlong congressional recess, the House and Senate couldn’t even agree on how to provide drought relief for the country. When Congress reconvenes in September, it will have only a few working days before adjourning again for a few weeks of last-minute campaigning.
Officials at the federal Department of Agriculture have also been analyzing what the expiration of the farm bill would mean. One predicted it “would lead to a cascade of disruptive changes in the agricultural sector that would impact farmers and lead to higher prices for consumers on the grocery store shelves.”
Warnings from Iowans
Eastern Iowa’s congressional delegation has joined the effort to warn against reversing farming policy.
“Going back to a 1949 farm bill would be disastrous for Iowa agriculture, family farmers, and American consumers,” said Democratic Rep. Bruce Braley. “It would threaten Iowa farmers with old-fashioned government controls and outdated limits on modern practices. At a time when we’re doing everything we can to keep the Iowa economy moving forward, this would move us backward — 63 years backward.”
Likewise, Republican Sen. Chuck Grassley, a member of the Senate Agriculture Committee and a farmer himself, said any result besides a new or extended farm bill is inconceivable. Otherwise, he sees inevitable higher prices for consumers.
“You just can’t have a 1949 farm bill that’s going to fit agriculture in the 21st century,” Grassley said.
“One of two things are going to have to happen. Either we reach an agreement on a five-year bill before Sept. 30 or we have a one-year extension of the existing farm bill. And the people that don’t want to agree to that better figure out if the taxpayers can afford to pay $18 for a bushel of corn.”
There are “tremendous differences” between the 1949 farm bill and the current version, according to Moore.
Most notably, Agriculture Secretary and former Gov. Tom Vilsack would gain the authority to set price controls, production limits on farmers and even the prices that food processors pay for corn, soybeans and wheat, and in turn what consumers would pay at the supermarket. The prices would be set according to a parity formula indexed to prices for such commodities that date back 100 years. But production limits could also lead to a supply-and-demand scenario that raises prices.
Moore sees such a significant gain of power as “a double-edged sword” for Vilsack.
“He would be very powerful, but he would be completely responsible for not only setting production but also setting prices, so he’d not only have the farmers yelling at him but the consumers as well,” Moore said.
In a sign of the tension surrounding the farm bill and its prospects for renewal, Democratic Rep. Dave Loebsack said House Republicans will bear the blame if Iowa farmers cannot survive the one-two punch of the drought plus a reverted farm bill.
“They will turn the clock back on Iowa farmers to the 1940s while they are currently suffering through the worst drought since the 1960s,” Loebsack told The Gazette.