The Hagstrom Report

Agriculture News As It Happens

Conrad: No immediate farm subsidy cuts, but no advantage to waiting on farm bill

Editor's Note: President Obama signed the debt ceiling and deficit reduction bill this afternoon, after the Senate passed the bill by a vote of 74 to 26. The House passed it Monday by a vote of 269 to 161.


STOWE, Vt. — Senate Budget Committee Chairman Kent Conrad, D-N.D., confirmed today that the debt ceiling-deficit reduction bill will not cut farm subsidies in the short run, but said that if the congressional joint super committee does not come up with a deficit reduction proposal by December, automatic triggers will affect farm programs.

“Agriculture spending is not included in the first stage, but if there is a sequestration, agriculture would be included because those cuts would be across the board,” Conrad said in a videoconference to the American Sugar Alliance meeting here.

Conrad also told the cane and beet growers that the sequestration would not have a direct effect on the sugar program because that program is operated on a no-net cost basis to the government, but he noted that if other farm programs have to take cuts there will be pressure to change the sugar program as a matter of fairness.

People “argue that sugar should take a hit even though it is a no-cost program,” Conrad said. During tough budget times in the past, Congress has imposed a fee on sugar growers to run their program.

Conrad said he does not know whether the deficit reduction process under the joint committee will include writing the new farm bill this fall rather than waiting until 2012. He said it is more likely to be written next year, but added, “I personally do not believe we are advantaged by waiting.”

He said there had been proposals to wait when the 2008 bill was written, but that he recognized the budget situation was getting worse and forged ahead with the bill.

“It is in our interest to move quickly,” Conrad said, adding that he believes the process will start in the Senate. He said the new farm bill should reduce program complexity, but also contain a disaster program that is funded for the life of the farm bill.

“None of us knows when the next slump in prices comes in the future,” he said.

Conrad said the new farm bill should address the 37 programs that do not have baseline after the 2008 bill expires. He said it also should make a provision for renewable fuels, but acknowledged that maintaining support for ethanol is difficult.

“Ethanol is very challenged,” Conrad said. “The support has really dropped away.”

Referring to a proposal from Sen. Amy Klobuchar, D-Minn., and Sen. John Thune, R-S.D., and others to end the ethanol tax break but improve the ethanol infrastructure that did not make it into the debt ceiling bill, Conrad said “It will be very difficult to resurrect a fair compromise.”

But, he concluded, “We have to keep trying,” noting that reducing dependence on foreign oil is the most important goal for government after reducing the deficit.

Meanwhile, Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., explained in an email to The Hagstrom Report why she had supported the debt ceiling-deficit reduction bill.

“This plan is far more reasonable than the crippling $48 billion budget passed by the House Republicans, which would have devastated our nation’s agriculture economy,” Stabenow said.

“We've secured the opportunity for the Agriculture Committee to weigh in on determining where cuts should be made, which I’ve always said must be a part of any agreement to ensure farmers and others impacted have input on these reforms,” she said. “America’s farmers certainly understand the importance of reducing the deficit and doing their part. We’re committed to developing recommendations that are both fair for agriculture and address the challenges of our nation’s budget and economy. The important thing now is to develop responsible recommendations that meet these goals.”

Senate Agriculture ranking member Pat Roberts, R-Kan., said he voted for the bill even though he had some objections to it.

“My first priority in voting today was to ensure our country did not default, which could have sent our country into economic chaos at a time when our economy is already on the brink,” Roberts said in an email.

“I will never play roulette with Kansans’ life savings,” he said. “This agreement protects Kansas families and businesses from an even greater economic crisis than we have already experienced while stopping proposed tax increases and cutting $2.4 trillion in run-away government spending. Had this agreement been mine to craft and pass alone, we’d have even greater spending cuts, but as Kansans saw over the last week, we could not achieve that with a Democrat-led Senate and the Obama White House.”