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Dairies endangered as farm bill expires

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Posted on September 30, 2013 |
By Zach Despart



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ADDISON COUNTY — The anticipated expiration of the U.S. farm bill on Tuesday could increase uncertainty for one of Addison County’s major business sectors, as well as cast the future of food security programs used by local residents in doubt.

“Dairy farmers will be left without a safety net,” Rep. Peter Welch, Vermont’s lone congressman, said on Friday.

The farm bill isn’t the only looming deadline Congress is facing. If Congress does not agree on a budget for fiscal year 2014, which begins Tuesday, the federal government will shut down.

As Congress attempts to avoid a shutdown, which would close many federal agencies, including the USDA, passing a new farm bill anytime soon seems increasingly unlikely.

THE FARM BILL

The farm bill, formally known as the Food, Conservation and Energy Act of 2008, sets the nation’s food and nutrition policy. First created by Congress in 1933, the farm bill is traditionally passed every five years. In 2012, Congress failed to pass a new bill, and instead voted to extend the 2008 bill through September 2013.

Observers say much of the gridlock can be traced to the Republican-controlled House of Representatives. The Senate passed a new farm bill in 2012 and again this past May, but it failed to garner enough support in the lower chamber to pass. Specifically, House Republicans want to cut funding for the SNAP program, formerly known as food stamps. The House passed a measure on Sept. 19 that would cut $39 billion from the SNAP program. President Obama and the Democrat-controlled Senate oppose these cuts.

In what has been a process mired in confusion, the House, which sought to save money with a new bill, actually added more to the deficit by extending the 2008 bill instead of passing the new Senate bill, which appropriated less money.

Another sticking point has been the proposed Dairy Security Act, or DSA, a voluntary program that farmers could opt into to protect themselves against volatile price swings in the industry. The DSA was passed by both the House and Senate agriculture committees in 2012, and by the whole Senate as part of its version of the farm bill. House Republicans have objected to the DSA because it was an example of too much government intrusion into the marketplace.

The ultimate goal of the DSA is to prevent farmers from overproducing when prices are high, which would send a glut of milk to the market and send the wholesale price plummeting.

Vermont’s entire congressional delegation has pledged support for the measure.

WELCH WEIGHS IN

Rep. Welch, a Democrat, said passing a new farm bill is “extremely important,” but on Friday said he is pessimistic that it will happen before the current bill expires.

Welch noted that the expiration of the Milk Income Loss Contract (MILC) program on Tuesday will leave the government without any sort of dairy program. The USDA’s MILC program compensates dairy producers when milk prices fall below the cost of production. Without it, farmers can be devastated by unpredictable price fluctuations.

“(Dairy farmers) will be left at the complete mercy of the market, which can be very volatile,” Welch said.

Welch said he does not think removing the SNAP program provisions from the farm bill and passing them as separate bills would be a good idea.

“The alliance of the interests of urban and rural parts of the country has always benefited both,” Welch said.

Welch said the farmers he has spoken with have asked for two things: that Congress get its act together and pass a farm bill, and that the body work toward an immigration bill. If farmers don’t know what government support they may receive or what their labor costs will be, it is incredibly difficult to run their businesses, Welch said.

The Congressman also renewed his support for the DSA.

“The Dairy Stabilization Act is crucial to both farmers and consumers,” Welch said. “It protects farmers against violent swings in the market, and it keeps milk prices from skyrocketing.”

Despite the complexity of the legislation — the last version of the farm bill totaled over 1,000 pages — Welch said Congress could pass a new bill Monday if the House adopted the Senate version that passed with bipartisan support. However, he admitted it was unlikely House Speaker John Boehner, R-Ohio, would schedule a vote on that bill.

The House Agriculture Committee, on which Welch used to serve, did support the Senate bill last year. Welch urged his colleagues to recognize the hard work of that committee instead of starting from scratch.

FUTURE OF SNAP BENEFITS

As the SNAP program is permanently authorized, it would not immediately be affected by that bill’s expiration. However, proposed cuts to the program have many in Vermont worried.

Marissa Parisi, the executive director of Hunger Free Vermont, said if the proposed House cuts to the SNAP program became law, they would be devastating to low-income Vermonters. Hunger Free Vermont is a nonprofit formed in 1993 that is dedicated to ending hunger and malnutrition in the state.

“These cuts would kick tens of thousands of Vermonters off the rolls for benefits,” Parisi said. She said that proposed drug screenings and strict work requirements would make it difficult for many to keep participating in the program.

As of June of this year, more than 100,000 Vermonters were participating in the SNAP program, accounting for 16 percent of residents in the state. According to research by the USDA, 14 percent of Vermont households are food insecure, meaning they cannot afford to fulfill their daily nutritional need.

Parisi said 3SquaresVT, the name for SNAP benefits in the state, is among the best such program in the country. She said the program “did its job” during the Great Recession and prevented thousands of Vermonters from falling into poverty.

Parisi lauded Welch for consistently protecting the interests of low-income Vermonters. She said Welch hosted a hearing in Washington on SNAP, and invited Hunger Free Vermont and organizations from other states to testify about the program’s importance.

“Congressman Welch has been a true champion of the farm bill and of the SNAP program,” Parisi said. “He stood up on the House floor against the $40 billion in cuts.”

Instead of slashing funding for citizens that need help the most, Parisi said Congress should allow the SNAP program to shrink naturally.

“When the economy is doing well, the program gets smaller,” Parisi said, explaining that beneficiaries leave the program as unemployment shrinks and wages rise. However, Parisi acknowledged this had not happened lately, noting that more people are in poverty now than in 2008, when the recession started.

“The evidence suggests the program is slowly leveling off,” Parisi said. “The economic recovery is slow.”

Despite claims by SNAP opponents that the program is plagued by widespread fraud and abuse, Parisi said these claims are simply not true.

“3SquaresVT has the lowest fraud rate in the country, about 1 percent,” Parisi said. “The USDA has cracked down on scammers to uphold the integrity of the program.”

USDA BRACES FOR SHUTDOWN

The full impact of the farm bill’s expiration will not be felt immediately, as some provisions expire with the fiscal year, others with the calendar year and others still with the crop year.

Bob Paquin, the executive director of the USDA Farm Service Agency in Vermont, said his office is planning for all contingencies, including a government shutdown. The USDA has nine offices in Vermont, including one in Middlebury.

“We’d like to see both a conference agreement between the House and Senate for a new farm bill, and a new continuing resolution so we can come to work on Tuesday,” Paquin said, referring to the piece of legislation that would keep the government running for a specified period of time. He acknowledged it was difficult to make decisions with so many unknown variables.

As months pass without a new bill, farmers will face tougher decisions.

The expiration of the MILC program is one of many hardships farmers may face.

Paquin said his office has exhausted all farm loan funding. At the federal level, he said there is an $800 million backlog in which farmers have been approved by the government for loans, but have not yet received funds. While disaster funding is permanently authorized, funding for farm loans is not.

“Farmers are going to need operating loans to purchase supplemental feed this winter,” Paquin said.

Paquin works on many programs beyond dairy that could be affected by the lack of a farm bill — such as conservation measures, cost share water quality programs, trade, research and commodity payments. He said his office is sticking to business as usual.

“We’re focusing on getting this done rather than the ‘what ifs,’” Paquin said.

Paquin spent last week in Washington, D.C., meeting with other USDA state directors from around the country. He said all types of farmers in every region of the country will be affected by the lack of a new farm bill.

“You start playing with one part of the food system, and there are ripples everywhere,” Paquin said.

Members of Congress have become so nonchalant about partisan gridlock, Paquin said, that the atmosphere in Washington about a looming government shutdown and expiration of the nation’s farm and food policy was “ho-hum.”

“People are almost dulled to it,” Paquin said.

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