Straight From D.C.: Issues Leading to the Next Farm Bill

January 28, 2017 02:25 AM
Farm After the Rain

Even though it feels like the previous farm bill just passed, you should know work is already underway to assemble ideas for policy or program changes for the next one. Most provisions of the Agricultural Act of 2014 expire on Oct. 1, 2018.

For now, the Congressional role consists of informal discussions between House and Senate Agriculture Committee staffers, representatives of farm and commodity groups and other groups with an interest in the farm bill process. 

Commodity and related interest groups are also holding conversations with their members, trying to get a sense of how the programs from the 2014 farm bill are working—particularly any shortcomings that need to be addressed. Final decisions on proposals won’t be made until those organizations hold their annual meetings.

The first steps in the new farm bill process should occur early this year, with House and Senate Agriculture Committee hearings. The House Agriculture Committee is likely to begin as early as March or April, both because their Senate counterparts will be holding confirmation for President Trump’s USDA nominees and because their committee membership is larger (45 members as opposed to 21 on the Senate Agriculture Committee). These field hearings will focus on commodity and crop insurance programs.

Some problems have already surfaced for commodity programs:

  • Upland cotton producers are dissatisfied with the STAX program established in the 2014 farm bill. Less than one-quarter of eligible acres enrolled in the STAX program in 2016. Cotton producers were unsuccessful in getting USDA to make cottonseed eligible for income support payments.  
  • Dairy producers are unhappy with the payments they received under their new margin protection program after recent declines in the price of milk and will be pushing for a more robust program. 
  • There is widespread concern about county yield estimates being used to establish payment levels under the ARC-county program. Some disparate payments were made in adjacent counties because USDA-National Agricultural Statistics Service data is not available for all counties. It is not clear if commodity groups will agree on what that fix should look like. 
  • The mechanism for shifting cotton program base to other crops established under the 2014 farm bill resulted in a significant jump in peanut acreage in the South. Planted area for peanuts increased nearly 20% from 2011 to 2013 and from 2014 to 2016. Low prices and commodity forfeitures resulted. The biggest increases were in Georgia, Texas and Alabama.

Other issues likely to be raised include increasing the acreage cap of the Conservation Reserve Program (CRP), eliminating restrictions on using credit to finance agricultural trade with Cuba and allowing urban farmers to become eligible for some USDA programs, such as loans, technical assistance and training. Some groups will also likely renew their efforts to impose some limitations on benefits received under the federal crop insurance program.

In the next few months, the fiscal year 2018 budget process will begin. If it includes reconciliation instructions, forcing the House and Senate Agriculture Committees to impose reductions in farm program spending, it would slow the farm bill process.

If no significant fights emerge over the nutrition title or how to implement mandated reductions in farm program spending, it is possible this next farm bill could be completed early in 2018, well ahead of schedule. The previous four farm bills have taken more than a year to complete, so history isn’t encouraging on this score. 

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Spell Check

Matthew Staebner
Franklin, CT
2/1/2017 06:21 PM

  I agree with parity pricing for farmers. The farm bill should also look to scale back or eliminate ARC and PLC programs and crop insurance subsidies.

Eastern, NE
2/1/2017 02:34 PM

  Hopefully, they'll tweak a lot of things. Organic crop insurance is one of the areas rife with fraud. FCIC needs to add a basis factor in the revenue insurance program. You end up never getting what you're guaranteed that you've paid for. Peanut farmers seem to always walk away with the lion's share of payments. Wheat classes need to be taken into account with regard to the wheat program. Right now, ARC and PLC market prices are based upon a melding of HRW, HWW, SRW, HRS and HAD wheat prices. There are times when HAD wheat is several dollars per bushel higher in price than the other classes of wheat. Not all farmers can grow HAD or HRS wheat due to the climate of their physical locations. The statistics service needs to put more teeth in the surveys sent out to farmers. Farmers need to be truthful and return the surveys timely. Reference prices for all crops need to be at least 33% of the 10 year average parity price for a crop. There will also have to be a paid set aside in times of excessive commodity supply. Or, be able to raise switch grass as a biomass fuel on those set aside acres to keep ethanol production at its peak. Farmers are great producers and in bad times have to overproduce to survive. As price takers most farmers are at the mercy of speculators and those that can force the loss back to the farmer (exporters). There's a lot of work that needs to be done. Or, maybe we all just need to raise dry beans, onions, carrots, radishes and have apple, peach, cherry, pear and plumb orchards too. Throw in a few hundred acres of strawberries and cantaloupes too. Why don't we just have a national law that reads farmers are only to receive no less than parity prices for their crops produced and restrict imports to commodities that can't be produced in the United States!

Lubbock, TX
2/1/2017 08:29 PM

  Frankly, I have great doubts that there are votes for ANY farm program that provides cash payments to farmers. It is going to be really hard to sell urban folks on why farmers are entitled to payments period. And with less that 2% of the population involved in farming or ranching do you really think the elected folks much care? That for sure includes Trump.


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