If Congress passes a short-term (one year or less) extension of the farm bill, there will be many unpleasant outcomes, as it will undermine the integrity of the next five-year farm bill.
Any extension of the bill will almost certainly include some cuts in order to placate ideological extremists in the House. Reductions in the baseline funding, as part of the extension, reduce the resources available for the next farm bill.
The 37 programs that lost baseline funding on or before Sept. 30, 2012 will require additional spending in order to be re-instated or continued. This affects:
All farm bill renewable energy programs
All farm bill disaster programs (expired in 2011), including SURE and livestock programs.
Some Rural Development programs, including value-added agricultural market development program grants
The beginning farmer and rancher development program and other local and regional food system programs
It is almost assured that all of the above programs will have less funding, even in a new farm bill.
Direct payments may be eliminated in a farm bill extension, which would remove $50 million from the next farm bill. This leaves less funding for programs like agricultural risk coverage (in the Senate bill) or price loss coverage and revenue loss coverage (in the house bill.) As a result, target prices or revenue assurances will be lower compared to the current proposals.
Enrollment caps for conservation programs will be even lower. The Conservation Reserve Program (CRP) is already slated to have a significant reduction in acreage and without a farm bill, sign-up has stopped.
The longer there isn’t a new farm bill, the less money will be available for the next. As commodity prices are generally high, and counter-cyclical programs aren’t issuing payments, cost projections for existing programs will be lower, which results in a lower baseline funding level.
When it comes time to write the farm bill after an extension, there will be limited options for cuts. As a result, the two largest pots of money, crop insurance and nutrition programs, will be the brunt of the reductions.