The federal budget and the farm bill

How might the federal budget, moving forward, affect the farm bill in 2013? Some have warned that the cuts will be much steeper to the ag budget and that it’s best to pass a five-year farm bill in the Lame Duck session of Congress before the end of this year.

Food & Agricultural Policy Research Institute (FAPRI-MU) director Pat Westhoff tells Brownfield the ag budget baseline may not be as low as some expect next year.

“Some people are a little too quick to conclude what a new baseline might look like because there will be some offsetting things going on,” Westhoff tells Brownfield Ag News, “Probably the real question is how the Congressional Budget Office might choose to evaluate the impacts on the budget of different alternatives before them and how much a new Congress, as things go into 2013 might think is an appropriate level of cuts to be made to the farm budget.”

Westhoff says an offsetting factor could be higher commodity prices, “Higher prices of commodities in the near-term, actually, while they reduce certain traditional farm program benefits can actually increase the cost of the crop insurance program,” Westhoff says, “You know, beyond 2012, when we have a new crop in 2013, the higher the value of the crop that’s insured, the higher the level of premium subsidies.” Higher prices in 2013, he says, would imply larger expenditures for at least the crop insurance program.

The balance of power remains the same in Washington following Tuesday’s election – President Obama reelected, the Senate maintains a Democratic majority, the House maintains its Republican majority, and, Ag Committee chairs have been reelected.

Still, Westhoff says, there are lots of scenarios that can unfold in regard to a farm bill.


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