Agriculture Secretary Tom Vilsack says he’s fairly confident that Congress will succeed in either passing an extension to the 2018 farm bill or finish up work on a new one by the end of the year in order to avoid severe repercussions of doing nothing.
The consequence of doing nothing would be the automatic onset of so-called “permanent” farm bill provisions created in 1938 and 1949 that are idled every time a new farm bill is enacted. The 2018 farm bill technically expired on Sept. 30, but it’s not until 2024 that farm commodity and dairy support programs are superseded by permanent law.
“The odds of the House and Senate taking some action – either a continuation of the existing farm bill or a new farm bill – are high,” Vilsack told reporters Wednesday. “And the reason they’re high is because the consequences of inaction are unacceptable.”
Dairy would be the first impacted by permanent law on Jan. 1, forcing USDA to begin buying up milk at about 162% the current price, resulting in “the government outbidding commercial markets for a sizeable share of dairy output; changing the shares of fluid milk, butter, cheese, and nonfat dry milk in the market; and subsequently raising the retail price of milk,” according to a recent Congressional Research Service analysis.
Crop insurance is permanently authorized and would not be impacted by the expiration of the farm bill.
“That’s the consequence of inaction,” Vilsack said, responding to questions about the Agricultural Act of 1949 and permanent law. “My expectation – my belief – is that people will do what they need to do to continue the existing farm bill or pass a new farm bill.”
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As to what Congress needs to do to finish a new farm bill, Vilsack said lawmakers need to get “creative” and “innovative” in finding ways to increase spending on priorities like increasing reference prices when they don’t have the funds and that includes usage of the Commodity Credit Corporation.
“To try to do everything that they want done within the farm bill creates the impasse that they are engaged in right now,” he said. “You can’t do reference prices because there’s not enough money in the existing farm bill to do that and everybody up there knows that.”
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