The House and Senate are beginning to conference the farm bill. Conference is a committee of key farm bill senators and representatives appointed to resolve differences in the bills passed by the Senate and House of Representatives.
Because the Constitution requires the House and Senate to pass identical legislation before it goes to the President, the conference committee process was established for the two chambers to resolve differences in legislation each of them pass. Conference committees have wide latitude in resolving differences to produce a final bill. Few rules actually apply to conference.
Many paths forward exist, with these 3 spanning the possible outcomes:
- The Conference Committee reaches an agreement that is enacted into law.
- The Conference Committee does not reach agreement and the current 2008 farm bill is extended for another year. A 2-year extension will likely include a reduction in direct payments at least equal to and probably larger than the current 8.5% cut under sequestration.
- The Conference Committee does not reach agreement and permanent law is repealed, ending farm commodity support programs. The farm safety net becomes the insurance program, meaning multiple-year losses would not be covered by the farm safety net.
As of the writing of this post, we think the first 2 paths have about the same probability of occurring. The last path seems unlikely but we do not think its probability is zero. The last 2 paths would normally not be in the realm of possible farm bill outcomes, but much of the politics and partisanship surrounding this farm bill is consumed with cutting federal spending. If Congress reaches some form of a budget deal, it is expected to be smaller and more designed to replace the current sequestration cuts. Agriculture would be expected to make a contribution to such an agreement, with the most likely source of funds being a cut in direct payments. A much less likely and more drastic outcome would involve eliminating all Title 1 support in order to capture substantially more savings to pay for sequestration.
It is easy to point to nutrition programs as the likely reason that a new farm bill will not occur. However, we think the farm safety net issues are just as, and maybe more divisive. Compromise will require not only considerations of content differences but also process considerations of how to get a bill passed in a contentious political environment focused on the level of government spending. Whether the bill is an extension or a new bill, it is distinctly possible that the bill will be attached to the federal budget deficit and concurrent spending resolution that must be passed by Congress.
SOURCE: Carl Zulauf, Professor, The Ohio State University, and Jonathan Coppess, Clinical Assistant Professor, University of Illinois.