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Extension buys time for farm bill

By TIM UNRUH

Special to The Hays Daily News

SALINA -- Food producers understand the need to cut federal budgets, Wallace County farmer David Schemm said, and he'd prefer Congress let agriculture groups have a say.

"We've been willing to step up and make cuts to programs. Please let us help design good risk management alternatives," said Schemm, president of the Kansas Association of Wheat Growers.

Like most groups dependent upon federal tax dollars, agriculture groups have been poised to see their funding reduced in the push to trim the deficit.

"Until we get a farm bill passed, let us design a program that's going to meet the needs of producers," Schemm said. "Let's not use a machete to do scalpel work."

One aspect of avoiding the fiscal cliff of tax increases (on all except the wealthiest) and slashed spending -- a deal reached Tuesday night -- was extending the 2008 farm bill for nine months. The agreement also delayed across-the-board budget reductions, known as sequestration, for two months.

"It does give time to rewrite the 2013 farm bill. What they will likely be doing is starting from scratch," said Dalton Henry, KAWG's director of governmental affairs.

Extending the 2008 farm bill -- which amounted to an estimated $284 billion through five years and $604 billion total through fiscal year 2017, according to the Congressional Budget Office -- will cost nearly $5 billion in 2013.

In a news release sent Wednesday, the Center for Rural Affairs in Lyons, Neb., called the farm bill extension a "disaster" for cutting future investment in "small rural communities and family farming and ranching," according to comments from Chuck Hassebrook, the center's executive director. Programs aimed at creating rural jobs and helping rural communities were left out of the farm bill extension, the release reads, and the extension prevents enrollment in the Conservation Stewardship Program this year.

Donn Teske of Wheaton, president of Kansas Farmers Union, said the extension changed much of the mandatory funding to discretionary funding. He also expressed angst the work of the House and Senate agriculture committees was bypassed.

While the Farmers Union is not a fan of direct payments, Teske said baseline funding was maintained for future negotiations.

The Supplemental Revenue Assistance program, which provides help for crop production and-or quality losses from natural disasters, was not funded, he said.

"The timing on this really sucks," Teske said.

Troy Dumler, a Kansas State University agricultural economist in Garden City, doesn't see a huge effect for Kansas farmers.

"I think we'll see both ag committees move fairly quickly to get a new farm bill passed," he said. "There was no disaster aid passed as part of the extension. We wouldn't expect that for crop producers, but for livestock, that could be an issue."

Old programs remain in place, but they're not as lucrative.

"It's a negative for dairy producers, based on what they would like to see," Dumler said.

As the months unfold in 2013, expect less federal aid.

"We assume some level of cuts will occur," Henry said. "Farm programs make up such a small portion of the federal deficit, yet it's kind of the favorite whipping boy."

Agriculture committees in both houses of Congress voluntarily have shown a willingness to accept cuts, he said.

"I think farmers have shown they are willing to make reductions," Henry said.

The Tuesday night agreement also addressed estate taxes, he said, capped at 40 percent beyond $5 million a person and $10 million a couple, which fell short of devastating to family farms.

It's critical to maintain what works, said Steve Baccus, a Minneapolis-area farmer, the Kansas Farm Bureau president.

"That's why passing a farm bill, or at least passing an extension, is better than doing nothing," he said.

One of the more critical farm programs, subsidized crop insurance, was not changed by the fiscal cliff deal.

However, improvements built into the 2012 farm bill, that failed, will not be enacted, Henry said.

"It is disappointing that those changes won't be made," he said. "They would have allowed crop insurance coverage to better match what a producer expected to raise."

But without insurance help during the drought-ridden 2012 growing season, Baccus said, "You would have seen a lot of blood flowing in Kansas."

Farmers expect direct payments they receive, decoupled from production, "would come to an end," said Joe Kejr, who farms in the Salina area.

Henry, of the wheat growers association, said direct payments were cut from the 2012 farm bill, and those savings were used for improvements to the crop insurance program and deficit reduction. But again, that bill didn't pass.

"Insurance has been our bigger concern," Kejr said. "You get disaster years like last year, with the way input costs are, it would be pretty devastating to the industry if there's not something out there."

The federal crop insurance subsidy makes the protection affordable, he said.

"It helps," Kejr said, "so you're in the game the next year."