US lawmakers are short on time and money to make the biggest cuts in agriculture in a generation and failure risks unintentionally driving up food prices and adding to an already onerous deficit. Just as Congress took the country to the brink of an unprecedented debt default by haggling over whether to raise the debt ceiling, fractious Republicans and Democrats may wait this year until the last minute to agree to significant cuts to farm supports amid historically high crop prices.
The US farm law, mammoth legislation that covers everything from food stamps to soil erosion, expires September 30. Without a new law or an extension, a 1949 law - the bogeyman of farm bill showdowns - would automatically go into effect. It would limit plantings and have the government pay farmers up to twice what crops would sell for on the open market. Farm subsidies would rise by tens of billions of dollars and consumer grocery bills would rise while the economy is still struggling to recover from the recession.
There are fiscal and policy obstacles to a new farm law. "The budget is going to be tough. The fiscal condition of this country is not in good shape," said Bob Stallman, president of the largest US farm group, the American Farm Bureau Federation. "The public generally is rejecting these annual income payments."
The outcome could be a factor in the fall elections. Iowa, the No. 1 corn, soybean and hog state, is one of the toss-up states where the fight between President Barack Obama and the eventual Republican nominee will be the fiercest. Ohio and Wisconsin, also agricultural powers, are toss-ups.
The Senate is expected to move first on the new farm law. Agriculture Committee chairwoman Debbie Stabenow, a Michigan Democrat, plans a final information-gathering hearing, on crop subsidies, on Wednesday before bill-drafting begins. She has vowed a bill in the spring.
Meanwhile, the House Agriculture Committee, which is chaired by Oklahoma Republican Frank Lucas, is holding four hearings around the country, ending on April 20, with hearings in Washington as its final preparation for the farm bill. Two changes are all but certain in the new farm bill - an end to the $5 billion a year "direct payment" subsidy that is paid regardless of need and the return of millions of acres of idle farmland to crop production.
Both would flow from likely cuts of 15 percent or more in crop subsidies and conservation funding. Direct payments are a top-line target of reformers, who say the payments are wasteful amid an agricultural boom. Odds are long that the bill can get done because of the legislative gridlock expected by mid-year due to election-year politics and budget pressures. Congress usually needs a year or more to enact a farm law.
Analyst Mark McMinimy of consultants Guggenheim Partners says "this is about as dysfunctional a Congress as you can remember." But his "low-confidence assumption" is a bill will be enacted this year "because the budget situation is going to be worse next year."
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