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Where Agriculture Means Business

The 2018 Farm Bill: Less of the Same?

As the calendar turns to 2018, members of Congress have headed home for the holiday recess after an eventful year including passage of the historic tax reform legislation. When they return in 2018, one of the items on their to-do list will be passing the Farm Bill.

Leaders of the Congressional agriculture committees began 2017 with the best of intentions to get a jump start on the 2018 Farm Bill in hopes of finalizing it well before its expiration in September 2018.

The Farm Bill authorizes a variety of USDA programs such as agricultural support, conservation and nutrition programs, and will consider changes to other important programs like crop insurance. It is usually completed on a five-year cycle, but leaders had hoped to complete it in 2017 or early 2018 so that it didn’t get caught in the cross-fire of the 2018 mid-term elections.

House Agriculture Committee Chairman Mike Conaway (TX) held the first full committee hearing on the Farm Bill last February. Since then, the committee has convened numerous hearings on all aspects of agricultural policy and held listening sessions across the U.S., including one in Cobleskill, NY on October 9.

The Senate Agriculture Committee held field hearings this spring in the home states of Chairman Pat Roberts (KS) and Ranking member Debbie Stabenow (MI) and has held hearings covering most of the Farm Bill titles since then.

While there has been significant preparation, there has been no actual legislative action on the Farm Bill, however, recent comments from Chairman Conaway indicate that his draft of the House Agriculture Committee version will be ready to go early in 2018. His draft is currently getting a cost estimate on the bill from the Congressional Budget Office (CBO).

So what will Chairman Conaway’s 2018 Farm Bill look like? Chances are it could look a lot like the 2014 Farm Bill, however, the CBO cost estimate will be a critical factor in what’s included in the Committee draft. That’s because although the Farm Bill is not a spending bill per se – i.e. not one of the 12 appropriations bills which funds the government each year – it does authorize many USDA programs with mandatory spending, which means that like entitlement programs, many Farm Bill programs are not subject to annual appropriations.

The 2014 Farm Bill came with a projected price tag of $489 billion over the five fiscal years from 2014 to 2018. After four years, the Farm Bill has actually cost less than anticipated. Earlier this year, the Congressional Budget Office estimated the total cost to be on pace for about $460 billion for the five-year period. The lower costs have come from nutrition programs, as the improved economy has meant fewer people qualifying for assistance, and crop insurance, as lower commodity prices have led to lower premiums and thus, smaller premium subsidies.

In terms of looking how much the agriculture committee can spend on the next Farm Bill, the agriculture committee leaders successfully argued against additional cuts in agriculture programs in the Congressional budget approved last October. When the agriculture committees actually start crafting the Farm Bill, however, the agriculture committees can’t take credit for the fact that the 2014 bill has spent less than expected.

It is important to remember that about 80 percent of Farm Bill spending goes to nutrition programs like the Supplemental Nutrition Assistance Program (SNAP, fka Food Stamps), so to save money on the Farm Bill, nutrition programs are a logical place to start. Doing so, however, puts pressure on the rural/urban bipartisan coalition that has traditionally passed the Farm Bill. For many members of Congress, including some from the Northeast, nutrition programs are the primary reason for supporting the Farm Bill.

So, what’s the Northeast perspective on the Farm Bill? Though the Farm Bill may not get as much press in our region as in other parts of the country, many of its programs are important to Northeast producers.

As noted in an earlier article in this issue, crop insurance is a critical risk management tool for many, a fact that was underscored in many parts of the Northeast in 2016. In addition, the Farm Bill will address specialty crop funding, conservation, export promotion, forestry and research programs — all important to the Northeast.

In reviewing the testimony from the various hearings, many farm groups have generally been satisfied with the operation of crop insurance and the current farm support programs. Two notable exceptions have been the cotton program and the dairy margin protection program, which many producers have been critical of, and other than the minimum coverage, has had low participation.

If programs like cotton and dairy are redesigned to be more effective, the changes to improve them will likely require more funding. This could be an issue because while the Congressional budget spared Farm Bill programs from cuts, it didn’t provide additional funding. In addition, according to the Congressional Research Service there are 39 programs with a five year cost of $2.8 billion that are assumed not to continue past 2018. This means that if Congress wants to extend these programs beyond 2018, they will have to find offsetting cuts. This includes programs like the Beginning Farmer and Rancher Development program, Value-added Agricultural Product Market Development Grants, Farmers’ Market and Local Food Promotion, and several programs related to organic research and extension.

So if Congress is writing a Farm Bill in a difficult fiscal environment and needs to find additional funds for some programs, other programs will be under pressure. In other words, while the 2018 Farm Bill may not result in major policy changes, the budget pressures may mean the final bill will look like the 2014 Farm Bill — just with less of the same. The House Agriculture Committee has a new Farm Bill website where you can learn more about the legislation and follow its progress.  

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