The Congressional Budget Office now says the farm bills proposed last year would produce smaller savings. Due to multiple requests - the CBO prepared new baseline projections for the cost of the agriculture, conservation and nutrition titles of the bill approved by the Senate last summer and the bill approved by the House Ag Committee in September. According to the CBO - both bills would reduce future spending relative to continuing current policies. The reduction - however - would be significantly smaller than the amounts estimated last year. The CBO estimates enacting the measure passed by the full Senate last year would save just 13.1-billion dollars over 10 years. That compares to the 23.1-billion dollars in savings CBO estimated in July. The plan endorsed by the House Ag Committee fares better - with an estimated 26.6-billion dollars in 10-year savings. But the savings were estimated at 35.1-billion last year.
CBO says commodity programs under Title I of the Senate-passed measure would cost 3.8-billion dollars more because recent higher commodity prices increase the expected cost of the income guarantees in the Agriculture Risk Coverage Program offered under the legislation; lower milk prices increase the cost of the Margin Protection Program for dairy producers; and the recent drought conditions will increase the estimated cost of the livestock disaster assistance program benefits for 2012 and 2013. According to CBO - spending on conservation programs under Title II would cost 1.4-billion dollars more because recent lower enrollment in the Conservation Reserve Program will eliminate some of the savings expected from the proposal to cap enrollment in the program. CBO changed its estimate of a provision regarding utility allowances in the Supplemental Nutrition Assistance Program and increased nutrition program spending 4.4-billion dollars.
As for the bill approved by the House Agriculture Committee - CBO said spending on commodity programs would cost 1.1-billion dollars more because of lower milk prices decreasing feed cost margins for dairy producers and drought conditions increasing the estimated cost of the livestock disaster assistance program benefits for 2012 and 2013. CBO estimates spending on conservation programs will cost 1.7-billion dollars more and spending on nutrition programs would be 4.3-billion more. The reasons stated are made primarily the same as those given for increases in the Senate bill. CBO also says crop insurance spending would cost 1.4-billion dollars more because increased participation in the Price Loss Coverage Option offered in Title I would make more producers eligible for benefits under the Supplemental Coverage Option offered under Title XI.
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