July 12, 2006 | By: Aimee Nielson
LEXINGTON, KY.

The farm bill, which expires every four or five years, is the United States’ most comprehensive piece of agricultural legislation. Its effects reach beyond farmers to agribusinesses, rural communities and even consumers, outlining provisions on commodity programs, trade, conservation, credit, agricultural research, food stamps and marketing.

Although the 2002 farm bill will not expire until 2007, policy analysts had anticipated 2006 to be a pivotal year in the farm bill debate. University of Kentucky College of Agriculture Economist Will Snell said, however, that this year has not lived up to analysts’ anticipation.

“The focus on other national issues, such as the war on terrorism, energy prices, immigration reform and rebuilding the Gulf Coast have somewhat limited national attention to the farm bill, “ he said. “But Congress and the U.S. Department of Agriculture have held hearings and forums across the country since last fall to gather input for the upcoming farm bill debate.”

Snell said the farm bill discussions primarily are being driven by three issues – the current status of the agriculture economy, the national budget and trade policy negotiations.

“The overall U.S. agricultural economy during the early years of the 2002 farm bill was characterized by record net farm income, expanding exports and improved debt positions,” he explained. “However, lower commodity prices, higher energy costs and lower government payments have caused U.S. net farm income to fall from recent record highs.”

The overall budget situation likely will constrain future government payments to boost net farm income, he added. While the 2002 farm bill was debated in a favorable environment of budget surpluses – which provided policy makers opportunities to maintain and expand some programs – the current and projected future budget deficit likely will affect future funding for most federal programs, including agriculture.

Snell went on to say that another important issue is the current round of multinational trade negotiations.

“Many lower-income countries claim that the United States and other high-income countries develop agricultural policies that unfairly depress world commodity prices and distort trade,” he said. “Trade negotiations could limit future spending on agricultural programs in the U.S. and potentially shift farm bill programs away from the trade-distorting policies to more acceptable environmental programs and payments that are not linked with production.”

Other issues that could be a part of the upcoming farm bill debate are distribution of payments among farm sizes and types, payment limitations, renewable fuels and the effects of farm programs on land rental rates, land prices, entry of young farmers and agricultural trade.

“All of these issues will play a part in the farm bill debate,” Snell said. 

For the latest news on farm bill developments, visit the USDA’s farm bill Web site.

Contact: 

Will Snell 859-257-7288