Asset Management Newsletter: Leadership Change on House Agriculture Committee Likely to Impact the Next Farm Bill
Author: Katherine R. English
As a result of the November elections, the House Agriculture Committee lost 16 of its existing 28 members (including 13 Democrats) when the 112th Congress was sworn in. The Honorable Frank Lewis of Oklahoma will serve as Chairman of the House Agriculture Committee for the 112th Congress. Representative Lewis, the former ranking member of the Committee, will bring significant changes to the committee’s leadership and priorities at a time when the current five-year, $288 billion Farm Bill is set to expire in 2012. The sitting House Agriculture Committee is charged with writing the next Farm Bill since all revenue bills must originate in the House of Representatives. Representative Lucas has stated that his committee will write the Farm Bill in the spring and summer of 2012 and deliver it to President Obama in late July prior to the presidential election in November. This schedule is a significant challenge for the committee since 75 percent of the House Agriculture Committee’s members have little or no experience with Farm Bill reauthorization.
The Farm Bill reauthorization will also likely be dogged by the fiscal conservatism that many newly elected Republican representatives rode to Congress. The largest expenditure in the Farm Bill is nutrition programs, such as food stamps, which have an annual price tag of $89 billion. Nutrition programs are unlikely to be cut after a prolonged economic downturn, so attention will likely turn to the remaining 25 percent of the bill’s budget which are more vulnerable: direct annual payments to farmers, programs that provide for “countercyclical payments” to producers based on market prices, and marketing loans and subsidies.
According to Joe Outlaw, an economist and co-director of Texas A&M University’s Agricultural and Food Policy Center, “The main bull’s-eye is on the $5 billion in direct commodity payments.” Congress has the option of allowing dozens of individual farm-bill programs to expire in 2012, resulting in almost $10 billion in savings annually. The affected programs would include disaster relief programs, which provide a safety net for catastrophic crop losses, and price- and income-support programs, including those for dairy farms and sugar producers. Mr. Outlaw predicts “If we are going to have any of these programs, which include the disaster program, in the next bill there will have to be cuts to other programs to provide the funding…All signs point to less of a safety net.”
Among the alternatives being considered by lawmakers is moving farmers to revenue insurance programs and away from direct payments. This change is supported by the Obama administration, but not necessarily by Representative Lucas. Mr. Lucas told the Oklahoma Farm Report in a recent interview that “Direct payments are the most compliant, the least trade distorting,” and that such payments are the best way to provide aid to farmers while remaining in compliance with the World Trade Organization’s rules regarding farm subsidies.
Representative Lucas, elected to Congress in 1994, has a strong agricultural background. He is a fifth generation Oklahoman from a farming family and a graduate of Oklahoma State University with a degree in agricultural economics. He is a strong advocate for farming and appears to be re-focusing the Committee’s attention toward the impact of regulation and trade on the economic viability of farming. These changes are a strong shift away from the focus on food safety and environmental conservation which dominated the Committee’s agenda under the previous chairman.
Representative Lewis issued this statement following his election as Chairman:
It is an honor to continue in this leadership role of the Agriculture Committee where I have served since I was first elected to Congress. As a lifelong farmer from a diverse, agricultural state, I have lived the real world challenges farmers and ranchers face across the country. I will continue to be a strong voice for production agriculture and rural America.
Oversight is a primary responsibility of Congress and we must fulfill that duty to the American people. We will hold oversight hearings of the Environmental Protection Agency (EPA), which has demonstrated a fondness for overreaching regulations that defy Congressional intent and threaten production agriculture and rural economies.
I will work with my colleagues to enact legislation that eliminates the obstacles for job growth and entrepreneurship throughout rural America.
And, I will work to make sure we write a market-oriented, fiscally responsible Farm Bill that will provide America’s farmers and ranchers with the necessary tools and certainty they need to produce the safest, most affordable, most abundant food, fiber, feed and fuel supply in the history of the world.
On the Senate side, a new Chairman will lead the authorization of the Farm Bill as well. Former chairman of the Senate Agriculture Committee, Representative Blanche Lincoln of Arkansas, who received more agriculture lobby contributions in the 2009-2010 election cycle than any other member of Congress, lost in November. Democratic Senator Debbie Stabenow of Michigan now chairs the Senate Agriculture Committee.