Farm Bill Failure in House Raises Quandary

Published in the August 2013 Issue Published online: Aug 16, 2013 Luther Markwart, Executive Vice President, ASGA
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The 2013 Farm Bill: Trying to get a farm bill passed has been a project of epic proportions. Never in the history of our nation have lawmakers in the House or Senate ever voted down the final passage of their body's version of a farm bill-until this year.

Final passage of the House version failed (195-234-6 not voting) when conservatives decided to amend the bill to include objectionable provisions for the Supplemental Nutrition Assistance Program (SNAP), formerly known as the food stamp program. Support by Democrats that was needed to pass the bill simply evaporated.

After intense finger pointing by both parties to assign blame for the legislative derailment, the immediate question on everyone's mind is, "Now what? How do you complete and pass a farm bill?"

First, put the bill into perspective. This is a bill that went through a marathon amendment process in the House Agriculture Committee in 2012 and 2013 and was reported out with strong bipartisan support each time. Before going to the floor this year, 230 amendments were submitted for consideration of which 103 were allowed to be offered on the House floor. Of the 103 amendments, 65 were passed, 24 rejected and 14 withdrawn.

The final bill (HR 1947) provided huge changes and savings in farm and food policy. The process has been very open with lots of opportunity for members to raise their concerns. House leadership now needs to take either the committee bill or the failed House bill as amended and remove a couple of "poison pill" amendments in an attempt to bring back some Democratic support. Republican leadership needs to get tough and move more of its members to support the bill. House leadership for both the majority and minority needs to get a firm headcount and send the bill to the floor without the opportunity for further divisive amendments, since it has already been amended 65 times.

Given the volatility of the political environment and the failed attempt, you have to take the risk of political mischief out of the equation. The farm bill is going to provide significant policy changes, in addition to somewhere between $23 and $40 billion in taxpayer savings over the next 10 years. Conservatives got big reforms and saved money, so they need to declare victory and move on. Assuming that the House finds a way to pass a bill, it will need to be reconciled with the Senate bill in conference, and both houses will need to vote for or against the final bill, or "conference report," in a straight up-or-down vote, with no amendments. If there is no success in this strategy, then an extension of current policy is the likely fallback option.

The House did reject a devastating sugar amendment offered by Rep. Joe Pitts, R-Pa., by a vote of 206-221 (seven not voting). The Senate rejected an amendment by Sens. Jeanne Shaheen, D-N.H., and Pat Toomey, R-Pa., with the same language as the Pitts' amendment 45-54 (with one not voting) and passed its version of the farm bill (S 954) 66-27 (seven not voting). The proposals by Pitts and Shaheen would have reduced beet and cane grower safety nets by $80-$120 per acre, forced oversupplies of the market and driven up policy cost to the taxpayers, as well as bring about further consolidation of our industry.

Both of these battles were very difficult due to the intense lobbying and the distortion of facts by our customers. Please thank your members of Congress for their work to help get votes to defeat the amendments. We will also need to remain vigilant as the agricultural appropriations bills work their way across the floors, which provide another opportunity for our opponents to attack our policy.

USDA Market Balancing Efforts: Mexico has had a record crop and will ship an expected 1.8 million tons of sugar to our market in this fiscal year. It's projected to ship more than 2.1 million tons to the U.S. in FY 2014. This has created a price collapse in the market when adding the sugar imported last year above the minimum import amount. The June USDA supply and demand estimates put domestic ending stocks well above the targeted levels to avoid forfeitures. USDA clearly saw the impending threat of forfeitures before Sept. 30.

Earlier in the year, USDA made modifications to the re-export program that allows cane refiners (and some beet processors) to import world-priced sugar, refine it and send it out to foreign customers. By increasing the license amount and lengthening the period to move sugar in and out of the country, it allowed domestic sugar to be refined and shipped to the world market, with a credit to import world priced foreign sugar at a later time.

In June, USDA decided to purchase some domestic sugar under loan and sell it to cane refiners who had re-export credits, which would reduce the amount of foreign sugar moving into our market. In addition, both Colombia and Panama have additional access to our market through our free trade agreements with them. USDA has decided to buy back a significant portion of the access for those exports destined for our market, which is allowed under those agreements. All of these actions are at a lower cost to taxpayers than the sugar-for-ethanol disposal mechanism ("Feedstock Flexibility Program," or FFP).

The underlying question is always, "Did USDA act soon enough and with the right volumes to avoid the forfeiture?"

Only time will tell.

ASGA 2014 Annual Meeting: Mark your calendars to attend the ASGA Annual Meeting on Feb. 9-11 at the Tampa (Fla.) Marriott Waterside Hotel and Marina. The ASGA rate is $215. A golf tournament will be planned for Sunday, Feb. 9, and an outstanding program will be designed for the general sessions on Feb. 10-11. Details can be found on the ASGA website at starting this fall; registration will be open and available the first week of November.