House Ag Committee Chair shares thoughts for 2012 farm bill process

Chris Clayton, DTN

SALINA, KS – Despite election-year rhetoric in Congress, House Agriculture Committee Chairman Frank Lucas still sees an opportunity to finish a farm bill in 2012, saying he feels a strong urgency to accomplish that goal.

The Oklahoma Republican noted it would help if farm groups were able to come to some understandings on how commodity programs should work in the future.

“This is something I have been harping on privately to various groups and publicly,” Lucas said in a phone interview Jan. 25 with DTN. “If we don’t come to some sort of a practical consensus, if we can’t march together; if we are fractured up then we’re lost. There is this perception outside the ag committee and ag community that we just automatically move in lock-step. That is not the case.”

The failed supercommittee process showed agricultural groups were divided over programs that would pay producers for shallow or steep losses, as well as whether target prices should be raised for crops and, if so, by how much. The bill crafted by the House and Senate Agriculture Committee leaders eliminated direct payments and used that $4.7 billion-a-year program not only for budget cuts but to craft a shallow-loss program, higher target prices and a stand-alone crop-insurance program for cotton producers.

Having worked through three farm bills, Lucas noted there are always commodity and regional differences, but groups tend to come together and compromise. Through the supercommittee process last fall, Lucas said it was clear a one-size-fits-all bill would not work and options were needed in commodity programs.

Several commodity and farm groups are set to have talks over the next week in Washington to see if they can come up with compromises and languages to satisfy their boards and member farmers.

Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), has indicated to Lucas that “the circumstances are right” in the Senate for her committee to move first on a bill. Lucas said he trusts her judgment, reflecting the two developed a good working relationship last fall.

“She was a pleasure to work with as we tried to put together a hurry-up proposal for the supercommittee,” Lucas said.

Lucas later added, “If it is possible to move a farm bill under regular order, Sen. Stabenow and I will move heaven and earth to get it done.”

One of the major questions is how USDA programs are affected by the budget-cutting act passed last summer. Automatic budget cuts to existing programs are set to take effect Jan. 1, 2013. Nutrition programs are exempt from those cuts, but it’s not clear how that will affect other farm bill programs. For instance, Conservation Reserve Program contracts may be exempt as well because they are multi-year contracts.

“The reason I bring this up is if big programs like nutrition are automatically left out and if big programs like CRP, because of the way they are put together, are exempt, then that just crams that much more cuts on everything else,” Lucas said. “That does cause me heartburn, but it’s not clear yet how that’s going to work out.”

The automatic cuts, and uncertainty about what’s affected, are why Lucas makes it clear he wants an entirely new bill rather than simple reductions in current programs. “Even if you have an extension, if the monies are drastically reduced for the core programs, then is it really an extension if you can’t fund all of the existing programs?” Lucas asked.

Waiting until a lame-duck session after the presidential election also risks that there won’t be time to get a deal and floor time in both chambers for a farm bill. Congress could move into November and December with a laundry list of unfinished business such as budget authorization bills and likely will also have to make a final decision on what to do about the Bush-era tax cuts that expire at the end of the year.

“Even though I consider the farm bill one of the most important pieces of legislation every five years or when we do it, a whole bunch of folks I sit with in the House don’t really rate us as all that important,” Lucas said.

Lucas also has several other elements he faces in the House. The House Agriculture Committee has to pay attention to the budget baseline for the farm bill, particularly the full baseline coming out in March. Further, the House Budget Committee may also push a resolution that could require more cuts in USDA programs. The House likely will push a budget resolution, partially to highlight differences between the two chambers because the Senate has been unable to adopt a full budget.

“I think they (House leaders) will pass another budget this year. I have to factor that in,” Lucas said. “And I need some commitments from my leadership about the availability of floor time.”

Lucas was in Washington last week as the House Agriculture Committee on Wednesday passed six bills specifically to focus on commodity trading and rewriting elements of the Dodd-Frank Wall Street Financial Reform Act.

“The goal of these six bills was to – in a very methodical, careful, targeted fashion – pick up areas the authors and I believe the CFTC deviated from the intent of Congress,” Lucas said.

The bills will require the CFTC to “follow the intent of the law,” Lucas said. Further, the bills will ideally force the Senate to take some action. “Will these six bills be signed into law by President Obama? I’m not holding my breath.”

But Lucas thinks the bills will pass the House and some elements could then eventually become part of a legislative package later in the year.

Lucas said the legislation does nothing to affect any situations that would have stemmed from the MF Global bankruptcy. Lucas said the investigations aren’t done into what led up to the disappearance of up to $1.2 billion in segregated customer funds, but it appears a criminal act occurred that would not have been prevented under the Dodd-Frank legislation.

“I personally believe that will turn out to be a violation of existing criminal law,” Lucas said. “Somebody will ultimately go to jail over that.”