Farm bill in trouble

Politico

House Agriculture Committee Chairman Frank Lucas conceded Thursday (January 9) that final action on a farm bill conference report is now likely to slip into late January — a major blow to himself and an ominous turn for the bill itself.

The draft package combines a landmark rewrite of commodity programs together with cuts from food stamps to generate in the range of $25 billion in 10-year savings, according to preliminary estimates. These accomplishments remain a strong argument for saving the bill. but the persistent in-fighting and delays are taking their toll and a worry for supporters.

“It need            s to be done as soon as possible but the issues are of such magnitude I can’t go until I get the issues addressed,” Lucas said. The Oklahoma Republican admitted to immense frustration — and some surprise — at the full dimensions of the standoff now between Speaker John Boehner (R-Ohio) and Lucas’s own ranking Democrat, Minnesota Rep. Collin Peterson, over dairy policy.

 “I don’t know that I understood how just hard the positions were by the two interested parties,” Lucas said in a hallway interview. “No one has shown any flexibility whatsoever.”

The latest farm bill delay — after what has already been a two year struggle — is a challenge to Lucas’s own leadership as chairman.

He is a likable, popular figure, but his critics would argue that he should have seen the crisis coming earlier. Lucas said he is now working on options to broker some compromise but he conceded as chairman, “There comes a point in time here where I have to pick a side and go with it.”

At issue is a new margin insurance initiative for dairy farmers which would include supply management tools to guard against over production. Peterson has argued that the supply controls are vital to keep down the cost of the insurance program. But Boehner believes the increased government role amounts to a bridge-too-far in a world of dairy policy which the speaker is already fond of comparing to the former Soviet Union.

Indeed Boehner sounded this theme again in his weekly press conference on Thursday. “The Soviet-style dairy program we have will continue, but let’s not make it any worse by including supply and management tools,” the speaker said. “I’ve fought off the supply and management ideas for 23 years that I have been in Congress, and my position hasn’t changed, and Mr. Peterson and others are well aware of it.”

Asked directly if he would block the farm bill conference report from coming back to the House floor if it did include the Peterson supply management language, Boehner suggested Lucas would protect him from having to make that decision.

“I am confident that the conference report will not include supply and management provisions for the dairy program,” the speaker said.

Lucas said that in his own conversations with Boehner, the speaker had warned him explicitly. “His statement to me was that if supply management is in it, it’s not coming to the floor. Flat out,” Lucas said.

“If the conference adopts Peterson exclusively, his language on dairy, we might not have a conference report. Where do I go from there?” the chairman said. “By the same token if the conference rejects Peterson, Collin has been a very key player in helping to pull this all together. How will he react? Will he light a match and blow up a stick of political dynamite?”

“I’m trying to work with both factions on any or all options.” Lucas said, but he likened the experience to trying to separate two over-heated bulls in the middle of a pasture.

“They get hot, they get mad and they lose their focus on what’s going on around them,” Lucas said. “You go to separate them, if you are not careful, you get smashed. I’m getting close to getting smashed no matter what happens.”

Peterson lost to Boehner on the supply management issue during the House farm bill debate last summer. But his language has the support of the Senate in its version of the farm bill. And the Minnesota Democrat believes he has the votes in the House-Senate talks now to ultimately prevail.

An important swing vote here is Rep. Mike Rogers (R-Ala.). Rogers is counted as loyal to Lucas but under pressure from dairymen at home to back Peterson if possible. “I get the feel that Rogers’s dairymen want Peterson’s language,” Lucas said, when asked about his own conversation with Rogers this week. “I get the feeling that Rogers wants to be reflective of his dairymen.”

Peterson has long said he would be willing to sunset the supply management tools, once farmers have had a chance to adapt to the new margin insurance program. Processors, who bitterly oppose the proposal, counter that the real flaw is that the premiums charged to farmers would be set under law — and not reflect market forces.

Indeed, unlike most crop insurance — in which the government subsidizes the premiums charged by private companies — the margin insurance would be run through the Farm Service Agency that has a long history with dairy programs. This was done in part to reduce administrative costs and because it is an agency known to dairy farmers. But critics argue that it would be useful to also tap into the experience of a pilot margin insurance program now run through the Risk Management Agency, elsewhere in the Agriculture Department.

Known as LGM Dairy, this initiative remains very modest in scope but the actuarial data collected could serve to help future adjustments in the rates for the larger margin insurance program envisioned in the farm bill. That might help facilitate a faster transition from the supply management tools favored by Peterson to a more market approach favored by Boehner and processors.

“I don’t know that I would word it exactly that way,” Lucas said, “But that would be the net effect of some of the stuff we have been talking about.”