WASHINGTON -- For the first time, Agriculture Secretary Tom Vilsack publicly expressed concern that Congress would not finish work on a five-year farm bill this year.
In recent weeks, the former Iowa governor has ratcheted up pressure on Congress and top House Republicans to get a bill done while warning that a failure to pass a new law could send the healthy farm economy into turmoil and boost uncertainty for farmers and ranchers.
"The reality is that there is a very serious risk that we might not get a farm bill done this year," Vilsack said on Wednesday at an event sponsored by the U.S. Chamber of Commerce. "The uncertainty of not knowing what the policies are going to be will create difficulties. We need a farm bill and we need it now."
Efforts to craft a farm bill appeared strong in mid-July, but progress stalled amid concerns by House GOP Speaker John Boehner that the chamber did not have enough votes to pass either the bill backed by the House Agriculture Committee or the one passed by the Senate. Democrats and Republicans have disagreed about where spending cuts should come from in agricultural programs and how big they should be, with the biggest divide found in nutrition programs.
"The reality is we're still working and there is some indication from Speaker (Boehner) that he has some reluctance," Vilsack told reporters after his speech. "I would hope he would get over that reluctance. I would hope he would recognize the importance of this to the country, particularly in rural America."
In recent weeks, the future of the farm bill has been linked to negotiations in Congress to avoid the looming fiscal cliff -- a series of automatic spending cuts and higher taxes scheduled to begin in January unless Congress acts. With only two weeks left, any farm bill action by Congress will likely be included in a larger deficit reduction package.
"At this point the fate of the farm bill likely lies with the fate of the fiscal cliff discussions, although Speaker of the House John Boehner has thrown cold water on the possibility of the inclusion of the farm bill in the fiscal cliff discussion," said Tim Johnson, D-S.D. "We don't have any problems passing the farm bill in the Senate. The House is another story."
Last week, Johnson and a bipartisan group of senators including Tom Harkin and Chuck Grassley wrote a letter to Senate leadership requesting that a farm bill be included in any end of the year legislation.
Unless lawmakers are able to extend the 2008 law or pass a new $500 billion bill, farm policy would revert back to 1938 and 1949 laws. The measures, known as the only "permanent legislation" of farm policy, would lead to a cascade of disruptive changes in the agricultural sector that would affect farmers and lead to higher prices for consumers on the grocery store shelves.
Dairy would be first to feel the impact on Jan. 1. The price the USDA pays producers would more than double to about $38.60 per hundredweight. Many fear milk prices on grocery store shelves would double as a result. Wheat would be impacted next beginning in late spring. Government funding for some programs such as food stamps and crop insurance would last until March 27.
Justin Dammann, a southwestern Iowa corn and cattle farmer, said the biggest concern for him and other farmers and ranchers is that the agriculture industry responds with a "knee-jerk reaction" when Congress ultimately reaches a deal on the farm bill.
"I'm not going to change my business tactics, my forward thinking plans because I really don't know what's coming," said Dammann. For now, he is running his farm operations with the assumption that Congress will extend the current law rather than pass a new farm bill.
"We're in limbo, and they need to get a farm bill passed. It's frustrating as a producer," he said."What we don't want to see happen is to have some crazy policy come out that's way out in left field and it changes and disrupts our whole system."