Farm bill extension no fix-all
MARSHALL – In the U.S. Congress, farm bills that set policy and fund U.S. Department of Agriculture programs, are usually passed every five years. This year, instead of passing a new farm bill, Congress passed a nine-month extension with modifications as part of “fiscal cliff” negotiations.
Local farm interests have found the bill a mixed bag – what Kevin Paap, who farms near Mankato and serves as president of the Minnesota Farm Bureau, calls “the good, the bad, and the ugly.”
According to Paap, the extension was only a stop-gap measure to prevent farm law from reverting back to 1940s legislation.
“All farm bills since then have only been amendments,” Paap said. “It’s the default position, nobody likes it. It’s unworkable.”
Paap said on the good side was the fact Congress made the estate tax exemption permanent. The tax exemption formerly stood at $5 million and is now fixed at $1 million, though the rate was raised from 35 percent to 40 percent.
“The average age of a farmer is 58,” Paap said. “We need to have planning, we need certainty. Previous laws had expiration dates, this made the estate law permanent.”
The bad part, according to Paap, was the bill continues to fund $5 billion in direct payments to commodity producers but cuts programs to fund crop insurance and livestock disaster programs.
Paul Sobocinski farms north of Wabasso and works with the Land Stewardship Project (LSP) on policy issues. Sobocinski agrees on direct payments, but differs on the estate tax issue.
The LSP’s stated position on estate taxes is that lowering the tax results in keeping more land in the possession of fewer landowners, to the detriment of new farmers.
“What I see from my perspective as a farmer, I think it’s very unfortunate the farm bill got renewed,” Sobocinski said. “Most farm groups all knew we had to give up something, and we came up with a general consensus that we should give up direct payments. But Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden agreed to strike it out. Agriculture was asked to come up with a certain percentage of cuts. Unfortunately, the McConnell-Biden agreement strikes out any support for new farmers, rural development, even disaster aid.”
Among the worst provisions of the bill was cutting funds for the Conservation Stewardship Program aimed at supporting farmers who conserve soil and water on their working farmland, according to Sobocinski.
Both Paap and Sobocinski agree that cuts are necessary to avert a looming fiscal crisis for the country.
“The ugly part is the fiscal and budget uncertainties,” Paap said. “We are on a one-way road to fiscal disaster. The tax side was taken care of, but they haven’t addressed the spending side.”
But for many, the worst aspect of the extension is the uncertainty of what congress will eventually come up with so farmers can make plans out longer than a year.
Dave Lanners farms corn and soy north of Minneota.
“It was just a year extension,” Lanners said. “I don’t know what’s going to happen next. Who knows what people in New York City think? Who know if Congress cares about the one or two percent of us (farmers) left?”