Cotton and dairy interests want farm policy changes attached to spending bill
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When farm-state lawmakers and there always-anxious lobbyists want no changes to a farm bill in place, the mantra is, “Do not open the farm bill… Let the farm bill play out; no changes.” But when those camps want changes, they frequently want to hitch a ride on a must-have spending bill.
A mini-farm-bill is underway via the spending package making the rounds of Congress. So far substantial changes to the existing cotton farm program and some “tweaks” to the dairy support program are in play. That may lead others to ask for their must-have changes on a must-have bill. If so, the agricultural sector may be getting too greedy, a frequent charge from opponents of farm policy.
Enter Sen. Chuck Grassley (R-Iowa). The corn and soybean state senator has a rich history of taking on southern crop lawmakers and their wishes for policy changes. But he certainly does not like it when he gets any challenges to his favorite programs, including the biodiesel tax incentive program and the Renewable Fuel Standard, especially corn-based ethanol.
Grassley said he does not think cotton deserves to be made eligible for the Price Loss Coverage (PLC) program. “It will just mean that the cotton people are sucking and sucking and sucking on the taxpayer. That’s not very darn good,” Grassley said. “They’re getting all kinds of help from the farm program anyway.” Ouch! Grassley wants some changes to the RFS, but this may not help him get the needed votes.
As readers of this space should know, the 2014 Farm Bill failed cotton producers in not including an effective safety net. Instead, cotton lobbyists at the time listened more to Brazil, who in the past successfully challenged the U.S. cotton program. But with new cotton lobby leadership and clear evidence that the 2014 Farm Bill was woefully short on a cotton safety net, cotton farm-state lawmakers and their staffs, with help from the cotton sector, have written language to correct that matter. But they want it enacted before the next farm bill for several reasons, including (1) making a payment possible for the 2017 cotton crop (which would be paid in 2018) and (2) by making cotton policy changes now, the new farm bill would have a higher budget baseline and thus a reduced need to find more funding or offsets ahead.
Peterson signals possible changes to cotton, dairy language in spending bill. House Agriculture Committee ranking member Collin Peterson (D-Minn.) said he is “somewhat optimistic” that an upcoming measure to fund the federal government will include aid for cotton and dairy farmers. The language if implemented would help increase the baseline for cotton and dairy aid programs in the 2018 Farm Bill as well, Peterson said. Changing the budget baseline for the programs would make it easier to retain the programs over the long term. “Those are now being debated in the budget ‘cromnibus,’ or whatever they call it, and I’m somewhat optimistic that there’s going to be a fix for both dairy and cotton in that bill,” Peterson said.
The current continuing resolution (CR) to fund the government expires April 28. Lawmakers are discussing a measure that would provide funding until September 30, the end of Fiscal Year 2017. That bill could include a combination of spending measures for individual departments and agencies, an omnibus, as well as a continuing resolution for other parts of the government. Combined, it is being called a “cromnibus.”
Aggies working with appropriators. No details have been released, but both Peterson and House Agriculture Committee Chairman Mike Conaway (R-Texas) have said they are working with appropriators on including the language adjusting cotton and dairy policy. “Whether this bill passes or not, I don’t know, but I think we have some chance of getting something in there which will give us a baseline in those areas moving forward,” Peterson said.
The tentative language also includes changes to improve the dairy Margin Protection Program (MPP). Some farmers have criticized the program, saying that the payments are not calculated fairly. Participation in the program’s most comprehensive coverage options have declined since it was implemented. Peterson said he would like to see the bill switch MPP payouts to a monthly basis instead of bimonthly and shift to a five-year enrollment instead of the current one-year program. Peterson also said he would like changes that raise the “sweet spot” of MPP enrollment from about $6.50 profit per hundred pounds of dairy to about $8 profit per hundred pounds. The minimum level of coverage is $4 per hundred pounds. Peterson said he’s advocated for the changes to Senate Appropriations Committee ranking member Patrick Leahy (D-Vt.), who represents a dairy-producing state. “I’m hearing it sounds positive,” Peterson said. “It’s only a couple hundred million dollars. It’s not a huge price tag.” Leahy is key because no “farm bill” gets done without his blessing regarding how it impacts dairy policy.
Changes to the cotton program if included would make cottonseed eligible, beginning with the 2017 crop, for farmer safety net programs, the Price Loss Coverage and the Agricultural Risk Coverage programs. Some cotton farmers have said the income support program created in the 2014 Farm Bill, the Stacked Income Protection Plan (STAX), is inadequate and has not provided the protection intended. The cotton industry has pushed for its crop to be covered in the subsidy programs offered in Title 1 of the farm bill, like other commodities. Conaway said both the dairy and cotton programs should be addressed “sooner rather than later. As for timing, Conaway said, “It would be terrific if we could get them both done in whatever appropriations work that we’ll be doing, but beyond that, I don’t have any inside knowledge.”
Bottom line. The 2014 Farm Bill debate was filled with all sorts of rancor among farm-state lawmakers and some commodity lobbyists and some university farm policy analysts. Most pledged to play nicer for the 2018 Farm Bill. No one appears to have told Sen. Grassley about that commitment.
The key test for the coming farm bill should be whether it is equitable. That means not a bloated focus on the crop or fiber sectors. It means adequate funding for agricultural research and conservation programs, some of which are at their maximum signup levels. And it means providing the livestock industry, which does not want to join the farm policy subsidy club at all, but instead wants adequate funding for serums to thwart and/or handle any Foot and Mouth Disease in this country. Certain sectors may be asked to “give” a little for spreading the safety net or funding levels around the entire agriculture sector. But many in the farm bill like to get, not give.
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