The Senate Farm Bill-Part I
Jun 18, 2018
On June 13th, the Senate Agriculture Committee marked up its version of the Farm Bill, in a very civil, business-like two and a half hour session. Unlike the House version unveiled in late March which failed to gain passage on the House floor on May 18th, the Senate version was developed in a fully bipartisan process, led by the chair and ranking member of the Committee, Senators Pat Roberts(R, KS) and Debbie Stabenow (D, MI). Under Senate rules, this bill will need 60 votes on the Senate floor to move forward, so the bipartisan engagement in its development was essential.
The Committee debated and added eight amendments during the mark-up, all approved by voice votes. The amended bill was reported out of Committee on a 20 to 1 vote, the sole ‘No’ from Senator Chuck Grassley, based primarily on not getting a chance to offer his payment limitation amendment for technical reasons. The Senate Majority Leader, Senator Mitch McConnell (R, KY), a Committee member, attended the session and assured his colleagues that he planned to have the bill on the Senate floor before the Fourth of July recess.
This farm bill is largely a status quo bill, with few major changes in any of its 12 titles. As with the House farm bill, I will describe the key provisions of the four largest titles--nutrition, commodities, crop insurance, and conservation--in this blog, and cover the other eight titles in a later blog. The Committee leadership has not yet released the CBO score for this bill, but it is expected to be budget-neutral, similar to the House bill.
As with the 2014 farm bill, crop farmers will have a one-time choice between the price-based Price Loss Coverage (PLC) and either the county-based or individual farm revenue-based Agricultural Risk Coverage (ARC) for their primary commodity support program for the duration of the upcoming farm bill. Since the Committee lacks additional funding to modify the price component of the formula determining the revenue guarantee under ARC, which has shrunk with lower crop prices over the last several years, most corn, soybean, and wheat farmers are expected to switch from ARC to PLC at that time, since PLC reference prices have been fixed since 2014. All farmers will continue to have access to the marketing loan program, which was reauthorized without changes.
The Senate commodity title did raise the percentage of county average yield to be counted as a transitional yield to be included in that ARC formula from 70 to 75 percent, and gives priority to using RMA data from the crop insurance program rather than NASS estimates to determine county yields under the ARC-county program. Farm groups have found that NASS estimates from outside core producing counties are not always reliable, so they had been pushing for this change for several years.
The Margin Protection Program for dairy farmers was replaced by the Dairy Risk Coverage program, allowing for higher coverage levels and setting new premiums under the program. Smaller-scale producers would receive discounts on their premiums, 50 percent for annual production under 2 million pounds and 25 percent for production between 2 million and 10 million pounds. The bill also establishes a dairy donation program for nutrition assistance for low-income individuals, allowing qualified expenses to be reimbursed by USDA.
The Senate bill also lowers the threshold for the adjusted gross income (AGI) limitation on receiving farm payments from its current $900,000 to $700,000.
The Senate nutrition title makes few changes to the Supplemental Nutrition Assistance Program (SNAP), unlike the House bill. It eliminates the bonus payments that states can receive for improving participation rates and payment accuracy under the program. It also reduced the paperwork burden for enrolling in SNAP for households including disabled persons or senior citizens. A pilot program included in the 2014 farm bill to test ways to improve job training and employment-related activities would be expanded to additional states.
It makes it easier for SNAP benefits to be redeemed in farmers markets by allowing point of sales devices to be used in more than one location. The Food Insecurity Nutrition Incentive, which provides bonus incentives to SNAP participants to frequent farmers markets will be named after Gus Schumacher, the former Under Secretary of Agriculture in the Clinton Administration (1997-2001) who helped establish the Wholesome Wave Foundation, which helped to pilot such bonus incentives. Mr. Schumacher died in 2017.
In the conservation title, the acreage cap for the Conservation Reserve Program (CRP) would be raised from 24 million to 25 million acres, and prioritizes land designated for wildlife enhancement, and ensure that the CREP projects receive at least 15 percent of continuous CRP acres. Funding would be cut from both the Conservation Stewardship Program (by $1 billion over ten years) and the Environmental Quality Incentives Program (by $1.5 billion over ten years). Under EQIP, the livestock set-aside would be cut from 60 percent to 50 percent, and that category would encompass conserving grazing practices rather than just CAFO’s. The funding for the Agricultural Conservation Easement Program would increase by $450 million per year, and the funding for the Regional Conservation Partnership Program would also increase, by $200 million annually, and would allow for multi-state projects.
Unlike most of the rest of the farm bill programs, the federal crop insurance program requires no reauthorization on a periodic basis. The crop insurance title does explicitly urge USDA to utilize resources to move individual crops from being covered by the Non-Insured Crop Assistance Program (NAP) to regular crop insurance coverage. It also includes provisions making the program more welcoming to farmers utilizing conserving agricultural practices, by reforming the way the program treats farmers who plant cover crops, and also by opening the possibility of offering discounts for use of practices shown to reduce risk, such as no till cultivation.