By Matt Reese
Every political road leads directly to the budget in Washington right now.
“The budget is driving the farm bill process. It is a black hole that is sucking all the air out of Washington, DC,” said Joe Shultz, senior economist for the U.S. Senate Committee of Agriculture, Nutrition and Forestry. “Congress invented the Super Committee with expedited powers to address the budget deficit.”
Of course, this effort did not work out as planned, but Shultz is proud to point out that only agriculture rose to the challenge.
“Only one committee in the U.S. Congress stepped up and worked to create a reasonable plan to save money – the House and Senate Ag Committees,” he said to the crowd at the 2011 Ohio Grain Farmers Symposium. “The thing that makes me proud to work in ag is that we were the only committee to come together on a bipartisan basis and give our fair share. We came up with $23 billion in cuts over 10 years. That is about 2% of the proposed cuts for the Super Committee and agriculture is about 2% of the federal budget.”
Moving forward, the budgetary challenges will only increase for the farm bill.
“The budget situation is only going to get worse,” he said. “There are going to be some real challenges as agriculture programs are targeted for cuts.”
Despite the challenges, Shultz said it is still essential to maintain a safety net for agriculture.
“There is broad agreement to move away from direct payments to a risk management program. That is the direction we need to go. I see highly volatile prices in the markets. Folks that don’t understand agriculture don’t understand this risk,” Shultz said. “We know there will come a time when prices will dip and we’ll have lower prices with continued high input prices. We saw some amazing difficulties with yields and production in some parts of the country this year. What better lesson when we think about a farm safety net?”
Shultz also pointed out the importance of a simple, user-friendly risk management program for the sake of improving farmer participation and the on-the-ground implementation of the program.
An efficient, streamlined approach is also important in this farm bill.
“We don’t have enough money or support to have overlapping farm programs,” Shultz said. “Crop insurance does not cover shallow yield losses and multi-year low price risk and that is what we need to address in the farm bill.”
All of agriculture needs to encourage Congress to move forward in what will become an increasingly challenging farm bill amid the budgetary woes.
“You need to tell members of Congress that we need to move forward right now because we all risk losing if we can’t move forward together,” Shultz said. “We are at a pivotal moment in farm policy right now. We are seeing a shift towards risk management and that means the work is hard.”