On May 23, the House Agriculture Committee ‘marked up’ the version of the farm bill put forward by Chairman Glenn Thompson (R, PA). This initial formal step in passing a new farm bill came nearly eight months after the previous (2018) farm bill had expired and six months after the 2018 farm bill was statutorily extended through the end of the 2024 fiscal year, September 30, 2024. Formally entitled “The Farm, Food and National Security Act of 2024’, the bill was reported out of committee on a 33-21 vote, with four Democratic members from swing districts joining all Republican members in support, after more than 13 hours of sometimes rancorous debate.
In crafting his draft bill over the last several months, Chairman Thompson was faced with many demands from stakeholder groups, especially those representing producers, to increase spending on commodity and trade programs, but was given no money from outside the farm bill process by the House budget process to achieve that objective. Thus, he was faced with the choice of either 1) addressing those demands by making offsetting cuts in other parts of the bill, or 2) not increasing funding for those programs at all. In the end, he chose option #1, and targeted his offsetting cuts largely on programs he knew were priorities for the Democratic Caucus in the House of Representatives.
The Committee-passed bill would provide increases in reference prices for all major program commodities after U.S. farm and commodity organizations pressed Congress for such actions due to the higher production costs their producer members have faced in recent years. A quick-and-dirty analysis conducted by agricultural economists at the University of Illinois and the Ohio State University after the bill text was released on May 17th found that the House version of the farm bill would increase support to farmers (through the commodities and crop insurance titles) by about 77 percent over the next decade. In addition, the changes would tend to reinforce the disparities in per acre payments available to row crop producers, with payments to corn, soybeans and wheat farmers–which account for 84 percent of base acres and are grown primarily in the Midwest and West–would increase 36 percent, 80 percent, and 76 percent respectively, while peanuts, rice, and cotton producers, raising crops primarily in the South, would see their payments increase by 114 percent, 187 percent, and 153 percent respectively.
U.S. sugar producers would also see their loan rate increase gradually by 62 percent over the next few years, improving their safety net protection. The main safety net for dairy farmers, the Dairy Margin Protection Coverage (DMC) would be extended for the lifetime of the new farm bill, with the top tier of production (between five and six million pounds of milk produced) getting additional coverage. In addition, the USDA staff who oversee the milk marketing order system would also be required to update the processing cost studies that govern how that system operates more frequently.
More mandatory funding is also provided in the trade title, doubling resources for the two key market promotion programs, the Market Access Program (MAP) and the Foreign Market Development Program (FMDP). The trade title also includes some provisions of the American Farmers Feed the World Act, which purports to prioritize use of U.S.-produced commodities under the main U.S. food aid program, the Food for Peace program, to the benefit of U.S. farmers In fact, these changes are more likely to make the program less efficient in delivering assistance to hungry people in the developing world with little discernible gain to U.S. farmers likely to materialize.
In the crop insurance title, producers will be able to procure up to 90 percent coverage (equal to a 10 percent deductible) on individual insurance policies, and also equalizes the subsidies between the supplemental coverage policies STAX (for upland cotton producers) and SCO (for all other insurable crops).
The agricultural research title includes important items such as providing $2.5 billion to help update and/or upgrade research facilities at land grant universities, as well as increasing funding by $95 million annually for the specialty crop research initiative (SCRI). Within the SCRI, it provides $20 million annually to undertake research to address the need to improve mechanization and automation of specialty crop farms, to address the long-term decline in access to farm laborers for this sector.
In order to pay for these areas of increased funding, the bill cuts funding in two key areas that are considered to be priorities for Democratic members of the Committee. The bill restricts the ability of USDA to use updates of the Thrifty Food Plan ( USDA’s estimates of the cost of groceries needed to provide a healthy, budget-conscious diet for a family of four) to increase benefit levels under the Supplemental Nutrition Assistance Program (SNAP) to low-income households. The Congressional Budget Office (CBO) has estimated that this step would reduce the cost of SNAP by about $30 billion over the next ten years. In addition, the bill would pull funding targeted at encouraging farmers to adopt climate-smart agricultural practices (provided under the Inflation Reduction Act of 2022) into the farm bill, but remove the requirement that only climate-smart practices be eligible for this tranche of funding. This move would provide perhaps $13 billion in savings to be distributed to other programs inside and outside of the conservation title.
The bill also restricts the Secretary of Agriculture’s authority to use funds from the Commodity Credit Corporation (CCC) to address emergency and unforeseen needs of farmers without Congressional signoff. The Committee staff believes that this language should generate about $53 billion in savings, but CBO has only estimated savings of about $8 billion, so the bill marked up on May 23rd actually increased the federal budget deficit by about $38 billion due to that difference.
Given the narrow majority the Republicans hold in the House and the opposition by many conservative members to any increases in farm bill spending, it is difficult to see how this bill can garner majority support on the House floor if it is brought up for a vote later this year.
