Failed Leadership and the Effects to Communities and Agriculture

20 September 2012

blog

By Sabrina Peterson and Jessy Gill

With only a week left before Congress recesses, the unthinkable is fast becoming a reality: the Republican-controlled House will not bring the House Agriculture Committee version of the 2012 Farm Bill to the floor for a vote, which passed with bipartisan support by the House Agriculture Committee back in July.

The 2008 Farm Bill expires September 30.

The situation is bleak. Why House leadership continues to delay a vote on the bill is baffling. Cuts to SNAP has been a major point of discussion throughout the Farm Bill reauthorization process and has been a large factor in the delay of the House vote. Many House members have called for $33 billion in cuts to SNAP, whereas others are calling for none. While the controversy is around cuts to SNAP, we should not be distracted from the fact that a lot of big corporations have a stake in this farm bill. Cuts to the SNAP budget and restricting the eligibility requirements for entitlement programs can only be seen as a mechanism for deregulation, privatization, and establishment of a two party class system; this is also evident in the Paul Ryan budget proposal which was adopted by the House in March 2012 (Ryan is the Chairman of the House Budget Committee).

If the September 30 Farm Bill deadline passes and Congress does not approve a new Farm Bill or an extension of the current 2008 Farm Bill, two major consequences will occur.

First, there are 37 programs making up at most $14 billion of the current $300 billion Farm Bill which will expire on September 30. These 37 programs include support for community food programs, conservation programs, and small farmers and ranchers, among other critical programs. Find the full list here. Once these programs expire with the Farm Bill it is highly unlikely that Congress will rebuild the safety nets necessary to support these farmers and community programs, as they are not part of the vision of the two class society referenced above. In addition to the critical 37, the Milk Income Loss Contract program, a program that compensates dairy producers when domestic milk prices fall below a specified level, is set to expire.

Second, the expiration of the Farm Bill triggers a return to the New Deal era, when federal policy reverts back to federal price supports determined by the Agricultural Adjustment Act of 1938 and the Agriculture Act of 1949, two laws which are currently suspended by present legislation and which are outdated.

What is the Agricultural Adjustment Act of 1938 and the Agriculture Act of 1949?

The Agricultural Adjustment Act of 1938 established mandatory price subsides for corn, cotton, and wheat in order to help maintain supply during periods in which production or market demand was low. Other flexible supports were also established for a number of perishable products and dry goods such as sugar and oilseeds.

The Agricultural Act of 1949 outlines the permanent authority for determining price support for producers of basic agricultural commodities. Unlike the Act of 1938 which determines basic agricultural commodity price support based on market year, the Act of 1949 determines price support by crop year. This means that because the harvest period differs depending on the crop, price supports for certain basic agricultural commodities such as wheat and corn would be affected at different times.

If both Acts were enforced today, producers of basic agricultural commodities would receive huge price supports from the federal government while producers of other commodities such as soybeans would receive nothing. Additionally, only producers growing basic agricultural commodity crops on acreage allotments recognized by the USDA would receive federal price support. However, the USDA records for wheat acreage allotments have not been updated since 1971.

Under the Act of 1938, the Secretary of Agriculture would determine price subsidies for basic and non-basic agricultural commodity crops (such as sugar and oilseeds). The current Secretary, Tom Vilsack has yet to comment as to how he would interpret and enforce the law should the Farm Bill expire without a new bill or an extension of the current bill before the end of the calendar year. During the 2007 Farm Bill reauthorization process, the USDA issued a statement under the same situation.

Given how difficult it has been for the USDA to interpret current law it is hard to believe it is able to interpret and enforce the Agricultural Adjustment Act of 1938 and the Agriculture Act of 1949 today. It is therefore unclear how much would change if the farm bill expired at the end of this month. What is clear however is that if the current bill expired, the 37 programs that actually make a difference in local communities and provide support to small farmers and ranchers will be lost.

As Congress continues to delay a vote on the Farm Bill, they will have to negotiate a new Farm Bill and deal with the fiscal cliff (the mess that Congress has made of our federal budget process) at the same time—after elections and during the lame duck session. The fiscal cliff, which includes the expiration of numerous tax provisions and extensions in addition to the $109 billion in sequestration cuts, is scheduled to take effect on January 2, 2013. Given the political climate during the lame duck session, Farm Bill cuts will likely be even deeper and more devastating.

Current messaging has been that “there’s a good chance that Congress will intervene” and “not to panic.” However, we as citizens must be held responsible and must recognize that Congress is taking us to the cliff and that it has a 100% track record of driving us over it.

Congress has continuously failed to follow through in equitable policy reform and act on the critical legislation at hand.

  • Budget reconciliation and sequestration
  • Entitlement and tax reform
  • Farm Bill extension
  • 2012 Farm Bill

In essence, Congress is gambling with the future of communities and farmers with little regard to the programs that are important lifelines to small farmers and ranchers.

What we stand to lose now as a result of failed leadership in Congress will deeply affect the progress of agriculture for years to come, and we believe will prove to be an even greater mis-step in the wrong direction.

 

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