Source Newsroom: Cornell University
Newswise — As members of Congress return to Capitol Hill today, lawmakers have less than two weeks to act before the current five-year-old Farm Bill expires. This multi-billion-dollar legislation affects federal policy on everything from crop production to school lunches. The “2012 Farm, Food and Jobs Bill” has passed in the Senate, and a different version of the legislation awaits action on the floor of the House.
Cornell University, New York’s Land Grant university and home to one of the nation’s top-ranked agriculture colleges, has several experts available to talk about the implications of failing to pass the Farm Bill – or of unwisely reconciling the two versions – for producers, consumers, the American economy and the world.
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Dairy industry already paying the price for Farm Bill paralysis
Andrew Novakovic is a professor in the College of Agriculture and Life Science’s Dyson School of Applied Economics and Management. Novakovic’s research focuses on the economics of dairy markets.
“Congress has yet to pass legislation to replace agricultural and food policies that are set to expire on Oct. 1. While this creates uncertainty for U.S. farmers in general, dairy farmers face an additional and severe handicap.
“On Sept. 1, provisions for the Milk Income Loss Contract program reverted to pre-2008 levels that render the program meaningless. Under the MILC program, dairy farmers have been receiving substantial countercyclical subsidies to help them offset the large imbalance between the price of milk they receive and the prices they pay for corn and soybean meal that they use to feed their cows. MILC payments began in February 2012 and would continue through November or December based on currently expected prices, if the 2008 provisions stayed in effect. However, under current law, the last payment will be made for milk produced in August. The exact amount of the payment varies each month and across farms, but for many of the nation's farms of average size or smaller, the payment amounts to almost 10 percent of their monthly milk check and can mean the difference between losing money and breaking close to even.
“If Congress fails to pass new agricultural and food policy legislation by the October deadline, America's growers of corn and other crops will continue to be covered by the crop insurance they purchase last Spring – but dairy farmers and other livestock farmers have no respite from drought conditions that are resulting in heat stress for many animals, poor pastures and expensive feeds.”
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Temporary extension could damage ag research for years to come
Thomas Björkman is a horticultural professor and researcher at Cornell’s College of Agriculture and Life Sciences who is developing Earth-friendly management techniques to solve contemporary limitations in vegetable production.
“A dangerous funding gap is created if there is only an extension of the Farm Bill, rather than a new one.
“Several important mandatory research programs that are in the Farm Bill will receive no funds at all. Scientists working on subjects critical to the health of the nation and the rural economy, such as specialty crops and organic production would have their primary funding programs suspended.
“They may have to redirect their research efforts and we would lose essential talent.”
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Senate’s food aid provisions must survive or lives will be lost
Christopher Barrett is a professor in the Dyson School of Applied Economics and Management who specializes in global agriculture and poverty and international development.
“Last year, Ethiopian farmers were devastated by a drought that struck the Horn of Africa. A quick, flexible and remarkably efficient food aid response helped these people pull through what could have been a deadly disaster. Much of that food aid was a gift from the American people. A large share of it was purchased nearby, in Africa, enabling faster and cheaper delivery.
“But the legislative authorization for the main U.S. food aid programs that make this assistance possible will expires at the end of this month.
“The Senate’s version of a new Farm Bill would impose helpful reporting requirements on wasteful food aid monetization that the U.S. Government Accountability Office estimates cost taxpayers hundreds of millions of dollars annually and too frequently disrupts commercial food markets in poor countries. More importantly, the Senate bill permanently authorizes local and regional procurement of food aid of the sort that has proved so successful in Ethiopia and other countries. Local and regional food aid purchases comprised only 11 percent of global food aid in 1999, but as every other major donor country began adopting this practice and the 2008 Farm Bill authorized a highly successful pilot program, that share jumped to 67 percent by 2010. Far more often than not, buying locally saves time, money and lives.
“By contrast, the Farm Bill passed by the House would end authorization to buy U.S. food aid commodities outside the U.S. and would promote monetization, both major steps backward.
“In the face of increasing numbers of people affected by disasters each year, rising food prices due to severe drought in the Midwest, and necessary budget tightening, the opportunity to reduce wasteful spending and improve foreign disaster response is a ‘win-win.’ Congress needs to pass a Farm Bill based on the Senate’s far superior version. Otherwise, families all over the world will suffer unnecessarily when the next disaster inevitably strikes.”
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House plans for target-price programs ‘a large step backward’
Joshua Woodard is a professor in the Dyson School of Applied Economics and Management who specializes in agribusiness, finance, risk management and crop insurance.
“While seemingly similar, the House and Senate versions have some stark differences.
“The Senate bill is laudable in that it relies heavily on risk management, market-oriented programs, such as Agriculture Risk Coverage. However, the centerpiece of the House bill takes a large step backward by featuring market-distorting target-price programs which are projected to disproportionately benefit Southern states.
“Rather than imposing unfair cuts on any one group, the Senate’s proposal makes big strides toward restoring equity in payments across crops and also brings the overall level of payments down substantially for all crops. The Congressional Budget Office estimates that will save taxpayers billions of dollars in the coming years.”
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