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What the Election Will Mean–or Not–For Agriculture

Tuesday, March 3, 2015

Election day is shaping up as not particularly important for American agriculture. The real drama will come after the election, when a lame duck Congress confronts what is called the “fiscal cliff,” namely the threat of a combined $500 billion in federal spending cuts and tax increases, currently set to begin in January 2013.

This year’s race for the White House, which is otherwise clearly important, will have relatively little impact on agriculture. This is because farm policy in the United States is almost entirely made by the Congress (in fact, almost entirely by the agriculture committees of Congress). Recall that President Obama’s Department of Agriculture did not even put a full legislative proposal on the table when the current Farm Bill debate began.

House and Senate elections are usually far more important to agriculture in the long run, but this year they are unlikely to make a huge difference in the short run because party control in the two chambers is unlikely to change, and also because it will probably be our current 2012 Congress, not the new 2013 Congress, that will take the most important Farm Bill action. The Farm Bill preferences of the current Congress have been known for a year now, ever since the chairs and ranking members of the agriculture committees presented their prenegotiated bipartisan blueprint to last year’s supercommittee, which then failed to act. The agriculture committees remain one place in Congress where a bipartisan consensus can still be found.

The preference of the committees has all along been for minimal Farm Bill change. Both committees want direct payments to be eliminated, with the money saved (less than $5 billion a year) shifting in part to insurance programs. Most important, both committees want only a token budget cut. The version of the Farm Bill that passed the Senate last June cut only $23 billion over 10 years, which is less than two percent of USDA’s total annual budget authority. The draft bill currently stalled in the House cuts $35 billion cut over 10 years, only a bit more than a two percent cut. The House Republican leadership decided to delay a floor vote on this kind of Farm Bill until after the election because they knew the Tea Party would criticize their failure to cut more.

In the lame duck session now coming up after the election, or possibly early in 2013 following some stop-gap short term measure, larger farm budget cuts might possibly loom. The fiscal cliff is real: important tax breaks and benefits are scheduled to expire on December 31, and if Congress doesn’t come up with $1.2 trillion in deficit reduction, a package of automatic spending cuts called “sequestration” will also go into effect. Both Congress and the President hope to avoid this outcome, possibly by enacting a “grand bargain” in the lame duck session that includes a new Farm Bill, but nobody can say at this point how it will play out.

Fortunately, American farmers in 2012 will be well positioned to accept whatever emerges from Congress in this lame duck session. Net farm income this year–despite the summer drought–could reach $122 billion, an all time record. Thanks to the continuing crop price boom, federal commodity programs (running only about $8 billion a year) have become far less important to American farmers. The Farm Bill, in fact, is now less important to farmers than to non-farmers. Only 13 percent of the current USDA budget goes to farmers, while 74 percent goes to consumers who qualify for federal nutrition programs, such as SNAP. So, as we approach the fiscal cliff, America’s farmers can take some comfort knowing their own financial future no longer rests so much with political outcomes in Washington.


Robert Paarlberg Robert Paarlberg (rpaarlberg@wellesley.edu)
Professor of Political Science, Wellesley College Adjunct Professor of Public Policy, Harvard Kennedy School Author of "Food Politics: What Everyone Needs to Know," 2nd edition to be published September 2013

View more posts by Robert Paarlberg

The views and opinions expressed in AgChllenge2050 blog posts are solely the opinions of the authors, and not those of Farm Foundation, NFP.