Farm Management Minute: Farm Bill or Food Bill

I have been reading some news articles and listening to radio reports about the progress of passing a new “Farm Bill.” For those of you that may not remember, the previous farm bill – the Food, Conservation, and Energy Act of 2008 – expired on Sept. 30, 2012, but Congress extended most programs for one year.

Both the House and Senate Agriculture committees passed separate bills in May of 2013 and if they each pass their respective chambers, then another round of negotiations will be needed to reconcile the differences. Given the fact that the recently extended farm bill was 1,770 pages long, I would anticipate there will be plenty of issues to “iron-out.” The vast majority (75 percent) of the funds spent in the 2008 bill was dedicated to food stamps and other nutritional programs which are now referred to as SNAP (Supplemental Nutrition Assistance Program). The remaining funds were allocated to agriculture subsidies and other programs such as forestry, conservation, energy, and rural development. I believe many in the general public think just the opposite: that the family farmer is collecting the majority of those taxpayer dollars. At one time that may have been the case, but that was several years ago. The present make-up of the farm bill is actually quite a change from the first piece of legislation, the Agricultural Adjustment Act of 1933, which was enacted to address severely depressed commodity prices.

I must admit that I am curious to see how the process of passing a new bill will unfold with a huge US budget deficit, partisan-bickering among politicians, commodity groups and non-farm parties lobbying for their interests, and other controversial issues at the national level. It almost seems like an impossible task to me, especially with the current bill set to expire in four months. Trying to figure out the final outcome at this point is about as productive as guessing what the final crop yields will be this year.

I think the best course of action is to stay focused on your own farming business, but to also be aware that policy decisions made at the federal level, upon passage of a new farm bill, may well have an impact on your operation. However, agricultural producers have proven over and over again that they are very experienced in dealing with a variety of uncertainties. A prime example of that was the uncooperative weather during calving season and, more recently, cool and wet conditions which have caused planting delays.

The SD Center Farm/Ranch Management program is offered state-wide and our courses include business and financial planning topics. If you would like additional information, please call our toll-free number: 1-800-684-1969 or check out our website: http://www.mitchelltech.edu/sdcfrm.