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Agricultural and Food Policy
Agri Outlook Radio
Number 141
Policy/Noteworthy: What are the impacts to current USDA programs -
in the absence of enactment of a new farm bill or an extension of the 2002 farm bill
past March 15, 2008? (3:47 minutes)
Audio/Video Script:
Dr. Bobby Coats
Extension Economist
University of Arkansas, Division of Agriculture
What are the impacts to current USDA programs in the absence of a new farm
bill or an extension of the 2002 farm bill past March 15, 2008? I’m Bobby Coats
Extension Economist University of Arkansas Division of Agriculture.
House and Senate ag committee staff requested the U.S. Department of
Agriculture provide a detailed document detailing the impacts to current USDA
programs in the absence of a new farm bill or an extension of the 2002 farm
bill past March 15, 2008.
The provisions of the Agricultural Adjustment Act of 1938 and the
Agricultural Act of 1949, would again become legally effective if a new farm
bill is not enacted or Congress fails to extend the 2002 farm bill by March 15,
2008.
Selected points from USDA’s analysis follow:
- The farm bills reversion to permanent law, would dramatically
narrow the universe of producers who receive support.
- The date when permanent law becomes effective for a commodity is
not uniform across commodities. Under the 1938 Act price supports operate on
a marketing year basis, rather than a crop year basis, while under the 1949
Act price supports operate on a crop year specific basis.
- Wheat – For wheat producers to receive price support
benefits, producers must have a 2008 acreage allotment and must plant wheat
in an amount no greater than the size of the allotment. Only farmers able to
produce records of 1958 wheat allotments as well as having wheat plantings
in crop years 2005, 2006 and 2007 would be eligible for price support
benefits.
- Sugar and oilseeds (including soybeans) – Due to the
manner in which the 1949 Act has been amended, price support may not be
offered with respect to oilseeds, sugar beets and sugarcane.
- Cotton, feed grains, honey and rice – Because marketing
quotas are not in effect for the 2008 crop of upland cotton, all upland
cotton is eligible for price support as well as all production of 2008 crops
of rice, corn, oats, rye, barley and grain sorghum. All production of honey
would also receive price support.
- Dairy – Price support would be offered with respect to
dairy products through government purchase of dairy products.
- Other commodities – Price support for other commodities
such as peanuts, wool and mohair would be at the discretion of the Secretary
of Agriculture.
To conclude, reverting to permanent law, though possible, is highly unlikely.
The Congressional Research Service indicated that permanent law is so radically
different from current policy and inconsistent with today’s farming, marketing,
and trade practices, as well as costly to the federal government, that Congress
is unlikely to let it take effect.
Final comment: I continue to believe that
good progress is being made in the writing of the 2008 farm bill.
This has been Bobby Coats Extension Economist University of Arkansas Division
of Agriculture.
Read the USDA document at
www.usda.gov/documents/fbpaper022908.doc
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