Farm Policy Roundup 2/8/13

Rancher with lasso

The Congressional Budget Office (CBO) released its February budget update this week.  The following analysis is based on comparing the updated February 2013 baseline to the March 2012 baseline.

Overall, CBO projects the entire farm bill baseline (all titles) to be down $13.7 billion or 1.5 percent. Conservation programs are projected to be down $351 million over ten years, or about 0.5 percent which is relatively modest compared to other farm bill titles.  Although the commodity title was up by 2.1 percent (about $1.3 billion), crop insurance was down 3.2 percent ($2.9 billion) and nutrition is down 1.5 percent ($11.7 billion) over ten years.

The biggest reduction among conservation programs affects the Conservation Reserve Program (CRP) as producers continue to allow acres to expire from the program.   Beyond that, conservation programs are essentially unchanged from the March 2012 baseline in terms of budget authority and a slight change in spendout rate over time. For example, the budget authority for the Farm and Ranchland Protection Program (FRPP) remains at $200 million per year, but a slight change in the spending rate has the effect of reducing outlays by $50 million over ten years. As expected, the Wetlands Reserve Program (WRP) and the Grasslands Reserve Program (GRP) have no baseline going forward, but WRP still has budget authority of $252 million for fiscal year (FY) 2014, or about $119 million over the 2012 baseline number.  Budget authority for both the Environmental Quality Incentives Program (EQIP) and the Chesapeake Bay program are unchanged compared to the 2012 baseline.  The Conservation Stewardship Program (CSP) also is unchanged except for a shift of $75 million from FY 2013 to FY 2014.

CBO points out three factors that, absent Congressional action, could have a major impact on federal budget forecasts going forward:

  • Automatic reductions in spending (sequestration) which are scheduled to be implemented at the beginning of March
  • The continuing resolution that currently provides operational funding for much of the government that expires in late March.
  • A statutory limit on federal debt, which was temporarily removed, will take effect again in mid-May.

CBO will publish a final baseline in March 2013, but the version released this week provides a peek at CBO’s current thinking and assumptions for the March version.

Senators Max Baucus (D-Mont.), Debbie Stabenow (D-Mich.) and Roy Blunt (R-M.O) recently introduced legislation to extend agriculture disaster assistance programs that expired at the end of fiscal year 2011. Specific programs that would be extended under the bill include:

  • Livestock Indemnity Program (LIP), which compensates ranchers at a rate of 65 percent market value for livestock mortality caused by disasters and reintroduced animals, such as wolves.
  • Livestock Forage Program (LFP), which assists ranchers who graze livestock on qualifying drought- or fire-affected pasture land.
  • Emergency Livestock Assistance Program (ELAP), which compensates producers for disaster losses not covered under other disaster programs.
  • Noninsured Crop Disaster Assistance Program (NAP), which would make fruit producers who experience losses due to frost or freeze in disaster counties, and did not have access to crop insurance, eligible to purchase 65 percent “buy-up” coverage for losses in 2012.
  • Tree Assistance Program (TAP), which provides financial assistance to orchardists and nursery tree growers to replant or rehabilitate eligible trees, bushes and vines damaged by natural disasters.

The bill would retroactively extend the disaster programs for 2012 and extend them through 2013. The disaster programs were not part of the nine month Farm Bill extension passed in January.

Senate Agriculture Committee Ranking Member Thad Cochran (R-Miss.) has announced key committee staff appointments. Sen. Cochran as appointed his chief of staff, T.A. Hawks, as Republican staff director for the committee and Steven Wall, his legislative director and counsel, has been named Republican general counsel for the committee.

The U.S. Department of Agriculture (USDA) has published two reports, “Climate Change and Agriculture: Effects and Adaptation and the Effects of Climate Variability” and “Change on Forest Ecosystems: A Comprehensive Science Synthesis for the U.S. Forest Sector,” that synthesize the scientific literature on climate change effects and adaptation strategies for U.S. agriculture and forests. The reports were created as inputs to the National Climate Assessment and included contributions from scientists from the federal government, universities, non-governmental organizations, industry, tribal lands, and the private sector.

USDA has also announced extension of the 2012 Census of Agriculture.  The Census of Agriculture provides detailed data covering nearly every facet of U.S. agriculture including land use, ownership, production practices, expenditures and other factors that affect the way farmers and ranchers do business. The deadline for submitting Census forms was February 4, but those who did not respond by the original due date will receive another copy of the form in the mail.

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  • Random Quote

    Changes in the 2012 Farm Bill appear both likely and may be significant, if not radical. Our country’s economic situation will be the most significant driver and agent of change in the 2012 Farm Bill. — Jon Scholl, President, American Farmland Trust