The House Farm Bill--Part II
Apr 26, 2018
This week, I will describe the key provisions in the other seven titles of the version of the farm bill marked up in the House Agriculture Committee on April 18th. While provisions in these titles (trade, credit, rural development, agricultural research, forestry, horticulture, and miscellaneous), only command a small share of the mandatory resources at the disposal of the House and Senate Agriculture Committees, they are nonetheless important in shaping how farmers, rural communities, land grant universities, and foresters will interact with the federal government over the next five years.
The trade title addresses both international food aid programs and programs that aim to promote commercial agricultural exports. According to CBO, the consolidation of the latter array of programs, including the Market Access Program (MAP), the Foreign Market Development Program (FMD), Export Assistance for Specialty Crops, and the Emerging Markets Program, into the International Development Program, would increase mandatory spending under the title by $45 million per year, or $225 million over five years.
On the food aid side, the bill eliminates of the ‘monetization minimum.’ Currently, the monetization program requires USAID to ship commodities destined for resale in recipient country markets to generate cash proceeds to operate development projects, in the process wasting at least 30 percent of the funds used for such projects. The House bill would end the requirement that at least 15 percent of the funds allocated for Food for Peace commodities used for such projects each year. It also raises the minimum amount that must be provided for such development projects to at least $365 million annually (from $350 million under current law), but allows cash assistance provided from other offices in USAID to such projects to count against the ‘safe box’ requirement. These proposed changes build on modest reforms included in recent farm bills.
CBO scores the rural development title with a net decrease in mandatory spending of $267 million over five years, as a result of withdrawing mandatory funds from renewable energy programs such as the Rural Energy for America Program (REAP), which have been folded into this title The REAP program helps farmers improve the energy efficiency of their operation through grants and loans. This farm bill would eliminate the stand-alone status of the renewable energy title, in place since the 2002 farm bill. The title also ends mandatory funding for popular programs such as the Value-Added Producer Grant program and the Rural Microentrepreneur Assistance program. It focuses attention on the opioid epidemic in rural areas by either prioritizing or earmarking a share of certain funding streams to addressing this problem, and similarly focuses more attention on improving access to broadband in rural areas.
As is normally the case, the credit title receives no mandatory funding, since USDA farm lending programs are funded through the annual appropriations process. The title raises the per farmer limit on both guaranteed ownership and operating loans from $700,000 to $1.75 million, with the limit to be indexed to inflation starting in 2019. If available funding is unchanged, this means that fewer farmers would likely be helped by these loan programs.
The agricultural research title increases mandatory funding for organic agricultural research and maintains funding for the beginning farmer and rancher development program, costing $168 million over five years. It allows USDA to devote resources to research issues of joint interest to U.S. farmers and farmers in other countries, such as plant and animal diseases, relaxing a restriction that had been in place since 1977. It reauthorizes the competitive agricultural research grant program, the Agriculture and Food Research Initiative (AFRI), and eliminates the matching funds requirement for AFRI.
The forestry title receives no mandatory funds in this farm bill, which is not unusual. The title establishes a new landscape-scale restoration program, which would provide funding both on a formula basis to states and separately through a competitive process. This new program is authorized to spend $10 million per year, subject to the annual appropriations process. It also authorizes the U.S. Forest Service to exempt certain of its salvage operations conducted in response to catastrophic events from being required to conduct full environmental impact analyses otherwise required under the National Environmental Policy Act (NEPA). These so-called categorical exclusions would not apply to areas exceeding 6,000 acres.
The horticulture title, first included in the 2008 farm bill, would receive a net increase of only $10 million in mandatory funds over five years. It ends mandatory funding for the Farmers Market and Local Food Promotion program and cost-share assistance for farmers making the transition to organic production. Funding is maintained for the Specialty Crop Block Grant program. In the regulatory reform portion of the title, it eases the steps needed to register pesticides, a move some critics view as allowing regulators to bypass consideration of the impact on endangered species. It also authorizes use of methyl bromide, a pesticide and fumigant whose use is restricted because of its ozone depletion effects, for emergency purposes.
In addition to the national animal disease program described in last week’s blog, the miscellaneous title includes $43 million in mandatory funding for a program helping socially disadvantaged farmers, and $103 million for a textile trust fund, both over a five year period. The latter is intended to help domestic textile manufacturers injured by high tariffs on cotton and wool products. It also establishes a commission to look at the transition needs in U.S. agriculture over the next 30 plus years, and establishes a position at USDA for an agricultural youth organization coordinator. As was the case with the catastrophic insurance policy, the service fee for enrolling in the Noninsured Crop Disaster Assistance Program, or NAP, was also raised to $350 per crop per county, not to exceed $2,100 per producer.