As Congress and the President grapple with the increasingly familiar specter of 11th-hour budget-making, national attention has temporarily been diverted from another casualty of the political process — the nonexistent 2012 Farm Bill.
Its predecessor, the Food, Conservation and Energy Act of 2008, expired at the end of the last fiscal year on Sept. 30. Though the Senate passed its version of the 2012 bill in June, the House has failed to schedule a floor vote on the legislation drafted by its Ag Committee. Election-year politics have undoubtedly played a role in the House's delay, as the bill drafted in committee authorized spending levels offensive to conservative ideology and drastic cuts to food assistance that similarly put liberals in precarious political territory.
Designed to garner support from a broad and diverse congressional contingent, the modern American Farm Bill encompasses an astonishing array of individual policy provisions — including agricultural trade support, food assistance programs, rural economic development, conservation measures and farm income support. The lion's share of funding allocated through the 2008 bill was, in fact, directed toward the Supplemental Nutrition Assistance Program, formerly known as the food stamp program.
While most of the food assistance and farm income support programs authorized by the now-expired 2008 bill can be funded through mid-2013 or can be continued through temporary Congressional appropriation without passage of a new Farm Bill, inaction has uniquely impacted the U.S. dairy industry. Longstanding dairy income and price supports legitimately expired with the demise of the 2008 Bill and New York milk producers must now make business planning decisions in a climate of greater-than-usual uncertainty. These supports proved a critical financial safety net for the industry in 2009 when milk prices plummeted below production costs and many producers found themselves in danger of losing their businesses.
Though milk prices are currently strong, high feed costs leave dairy producers worried over a repeat of 2009 losses, but this time without government intervention. While it is highly likely that Congress will indeed pass a new Farm Bill early this year to avoid reverting to archaic 1940s-era "permanent policy," the interim is, at the very least, disconcerting for the state's largest agricultural sector.
Each fall, I begin my undergraduate Agricultural Policy course at the State University College at Cobleskill by asking students why the U.S. government gives so much attention, and financial support, to agriculture and not other industries. Invariably, most of them reply that government action is justified because agriculture is the premise of all other economic activity. Innovation and productivity in manufacturing, information services, technology and the like simply cannot happen unless society's primary survival needs are met with adequate food supply. As it turns out, this answer is not incorrect.
But, justification for spending billions of taxpayer dollars is multi-faceted and goes further than just the fact that food is essential. The truth is, even farmers who adopt the most sophisticated, state-of-the-art management and production protocol operate at the whims of nature. Rain, or lack thereof, can put an otherwise efficient, competitive business in jeopardy. Prices that farmers receive for their products are highly volatile and, at best, difficult to forecast because of the nature of supply and demand for farm goods. Farm operations, and particularly dairies, are highly capital intensive and often require significant debt loads that preclude most potential entrepreneurs from starting new farm businesses.
Taken together, these points paint agricultural business ventures as exceptionally risky. Support programs in Farm Bill legislation are created to help navigate "bad" years that have potential to force good businesses out of business and leave critical gaps in the nation's food supply.
While it is critical that government strikes a path toward more responsible fiscal decision-making, the consequences of forcing New York farmers into a guessing game over the future of industry support are real and significant. A business that has always been difficult is, for now at least, more difficult than it needs to be.
Jason Evans teaches at the State University College at Cobleskill.