Agricultural News
Avoiding the Fiscal Cliff: How the Farm Bill Extension Affects Oklahomans
Thu, 03 Jan 2013 16:42:02 CST
This article from the OSU Agricultural Policy News was written by Jody Campiche, Assistant Professor and Extension Economist.
In an effort to avoid the 'fiscal cliff', a deal was reached on a tax package that includes a nine-month extension of the 2008 farm bill through the end of September. While many are upset by the partial extension, the farm safety net has been extended to another crop year and permanent farm law will not go into effect. Producers will continue to be eligible for direct payments, counter-cyclical payments, ACRE payments, and marketing loans for the 2013 crop year. Without this extension, these programs would not be in place for the 2013 crop year and producers would have much less certainty about the status of the farm safety net. The milk provisions in the 2008 farm bill were also continued and the extension preserves baseline funding. In an interview with Ron Hays (Radio Oklahoma Network), Frank Lucas, Chairman of the House Ag Committee, said that the extension was 'the best possible scenario in a terrible situation." A 5-year farm bill was the preferred option, but Lucas said that 'in the environment we are working in, it is absolutely a miracle that we got it done."
The House and Senate Agriculture committees agreed to a one-year extension of the farm bill that included additional dairy provisions and mandatory funding for Supplemental Agricultural Disaster Assistance, which includes the Livestock Forage program, Livestock Indemnity Program, Tree Assistance Program, and the Emergency Livestock Assistance Program. However, the extension was modified by the Senate resulting in the removal of mandatory funding for these disaster programs. Instead, the extension includes an authorization of appropriations for the disaster programs which means that the funding could be discussed in the appropriations cycle. Funding for the disaster programs could also be included as part of other disaster discussions (such as the Hurricane Sandy Relief Bill) or could be part of the five-year farm bill.
Some programs in the 2008 farm bill did not have baseline funding past 2012 and will not receive funding through the nine-month extension. However, most Oklahoma producers will not see much of a change in farm bill programs from the 2012 crop year. Even though funding for livestock disaster programs is extremely important to Oklahoma producers, these programs have not been available since October 2011, so livestock producers did not receive payments for 2012 losses.
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