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DAVID KRUSE

By Staff | Jul 19, 2013

We have a farm bill in place. The Agricultural Act was enacted in 1949 as permanent law. Recent

farm bills have covered five-year terms after which they expire so are temporary.

The most recent farm bill was extended one year and will expire Sept. 30.

If Congress fails to enact another farm bill or add another extension what happens next?

Then Ryan blamed the Democrats for its failure.

The GOP caucus is hard at work trying to re-invent the wheel to pass some- thing to make it look like, even if deception, that the House has passed a fam bill. They have discussed breaking the bill up into two parts, foods stamps

None of it is going to work or be reconcilable with the Senate to actually produce a new farm bill. House conservatives want much larger cuts to SNAP so there is an impasse within the House that if the conservatives ac- tually passed such a bill it would be dead in

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We get parity prices for our grain and live- stock. Parity prices are derived from a for-and farm programs.

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mula using the relationship between prices and cost of production using 1910 through 1914 prices as the base years.

They are pretty darn good. Examples for major commodities are $12 for corn, $28.90 for soybeans, $18.30 for wheat, $292 for cattle, $160 for hogs and $52 for milk.

USDA Secretary of Agriculture Tom Vil- sack would be required to hold producer ref- erenda establishing quotas and production controls. The USDA is required to buy and store enough dairy products until the price of milk reaches parity.

Farmers would be able to put the 2013 crop under non-recourse government loans at prices set between 50 and 90 percent of par- ity. Consumer food prices would skyrocket as would the cost of SNAP.

The U.S. would immediately become an un-reliable supplier to the world export mar- ket causing China to ink some permanent food deals with South America.

Meat exports would shrivel to virtually nothing. We would be spending a lot on a le- gal defense for suits filed against us at the WTO.

Food stamp spending would go on un-re- formed.

That is what the conservatives in the House essentially voted for when they failed to enact a new farm bill. What they voted for was the total disruption, upheaval and dislo- cation of ag markets domestically and around the world, bearing responsibility for the food shortages that would follow.

One could say that the repercussions of a vote against the House farm bill were not very thoroughly thought through by the op- ponents.

The 1949 Agricultural Act was made per- manent in order to be such a poison pill that Congress would never swallow it and instead enact new legislation. Those that thought this was enough to keep Congress functioning never planned on a Congress like this one.

This Congress swallows poison pills for breakfast and is still hungry for more at lunch.

Several things happened that have caused detours from the norm and some would say rational path in Congress. One is that bi-com- mittees produce bills that fail in the House. Another is that members add amendments they want that are passed, yet they vote against the bill; and the committee chairmen, six of them in the case of the farm bill, in- cluding Paul Ryan, split from the party lead- ership voting against the bill.

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the Senate anyway. There is no path to a new farm bill in all of

this, just ideological expression of political will. Speaker Boehner is ignoring a letter from 530 farm groups including the Farm Bureau not to split the bill into two parts.

He now serves at the pleasure of the con- servatives in his caucus and even business Republicans are now being cut out of the process. There is talk of the urban-rural al- liance that has been the basis of support for the food/farm bill breaking down.

I don’t see that as the case, just the process being hijacked by some radicals.

The farm bill is a USDA bill, essentially authorizing the programs, food and farm, that are administered by the USDA. That makes sense and should continue. Certainly urban legislators support the food programs and farm legislators support the farm programs, but there is a balance struck between the two.

That balance was written into the bill that came out of the House committee, but was disrupted by the addition of the Southerland amendment which went too far, changing SNAP requirements, alienating too many ur- ban Democrats, while not going far enough to secure conservative votes.

If the House wrote and passed something that could actually go to conference commit- tee with the Senate, so that the resolution had to be voted on by the entire House, it may pass and it may not. They are grasping at straws at this point.

As September nears they will get more desperate to avoid the Agricultural Act of 1949 and go for another annual extension, but even that doesn’t get us to the next elec- tion.

Vilsack has had to dust off the decades old law to see what he is supposed to do next if Congress continues to do nothing on a farm bill.

Yippee. We get parity. Unfortunately, we will ultimately pay for it.

David Kruse is president of CommStock Invest- ments Inc., author and producer of The Comm- Stock Report, an ag commentary and market analysis available daily by radio and by subscrip- tion on DTN/FarmDayta and the Internet.

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