Mark your calendar for Sunday, March 16, 2008. Unless Congress passes a new Farm Bill or extends the 2002 Farm Bill, which Speaker of the House Nancy Pelosi says she will not allow, the 1938 and 1949 permanent farm legislation will go into effect. Buckle your seat belt.

Let us return to those thrilling days of yesteryear when Grandpa and his flock of boys were scratching out a living for the family on 160 acres. It was probably a corn, wheat, oats, and hay rotation, with milk cows, fat hogs, and a yard full of chickens and geese. Grandpa would visit the ASCS office to get his acreage allotments about this time of year. You can do the same, 70 years later. Same name, same farm, just a bit bigger. (And here we thought agriculture had been making progress!)

USDA program staff members have provided Congress with an analysis of how USDA farm programs will be affected without Congressional action by March 15 (Saturday.) In lieu of a new Farm Bill or an extension of the 2002 Farm Bill, there will be considerable changes in farm programs, elimination of others, and some, such as crop insurance, will not be affected. To avoid confusion, keep in mind that when new farm legislation is approved every four or five years, it suspended the permanent legislation implemented in 1938 and 1949, and now the 1938 Agricultural Adjustment Act and the 1949 Agricultural Act are about to come to the forefront.

All of the Direct Payments and Counter-Cyclical Payments in the 2002 Farm bill will come to an end, along with Marketing Assistance Loans, Loan Deficiency Payments, the dairy price support purchase program, and the Milk Income Loss Contract program. When those programs will expire Saturday, they will be replaced with an allotment program, which provides a $7.80 support price for wheat producers with a wheat allotment. Wheat cannot be planted on greater acreage than the allotment, and farmers will have to produce records that their farm had an allotment in 1958, and had also planted wheat the past three years. Since acreage allotments have not been issued since 1971, and USDA does not have your annual acreage records back to that year, it is unclear how the program will be brought into the 21st Century. Don’t worry about soybeans or any other oilseeds, since amendments have eliminated them from allotments and price supports.

Without marketing quotas for feed grains, all corn and other feed grains would be eligible for price supports. The price support for corn would be 50% to 90% of the parity price, as determined by the Secretary of Agriculture. The current parity price is $7.56, so the range would be $3.78 to $6.80 for the Secretary to determine the support level. The Farmer-Owned Reserve will return for wheat and feed grains, as will a base and yield program. There actually seems to be part of the 1949 Act that allows the Secretary to convert commodities into industrial hydrocarbons.

For conservation programs, enrollments would cease at the end of this week; but participants in the CRP and the Wetlands Reserve would still receive technical assistance and program payments. EQIP and CSP programs would continue, but funding ratios, assistance caps, and optional parts of the programs would all be terminated. Compliance parts of the continuing programs would not be terminated.

Since the USDA trade assistance programs developed after the 1949, they would expire this week. That includes PL-480 programs, export credit guarantees, and market access assistance programs.

Food stamps will continue in the 50 states (it will expire in the US territories). Child nutrition programs, school lunches, Women’s Infants, and Children’s and other such programs are authorized under a different schedule and will expire at the end of next year.

Nearly all of the Rural Development programs are expected to continue. Many of them are incorporated into permanent law, such as the Rural Electrification Act, Rural Housing Service, and others. However, their activities are dependent upon annual program funding, and that expired at the end of last September.

Farm loans serviced by the Farm Service Agency received temporary funding for the current fiscal year, and that is considered an implicit authorization. However, some farmers seemingly eligible for renewal of loans will be unable because of an expiration of the authority that allows renewals. Also expiring is the provision that sets aside a portion of the money for beginning farmers.

Crop insurance is governed by a permanent law that does not expire, and that program will continue without being affected.

Summary:
Congress has a deadline of March 15 to either pass a new Farm Bill or renew the 2002 Farm Bill, and if neither occur, the suspension expires for various provisions of the 1938 and 1949 Agricultural Acts and those permanent laws come to the forefront to govern farm programs. While many USDA services like crop insurance, nutrition, and rural development will continue with little change, commodity programs will undergo a major overhaul. Price support mechanisms will convert to base and yield, production allotments, and prices will be supported at a percentage of parity levels.