Coming House measure has some farmer-friendly proposals for crops, livestock and dairy
It’s clearly two very different paths when it comes to new farm bill provisions and proposals from House Republicans and Democrats.
The following is based on an interview AgriTalk had with House Ag Chairman G.T. Thompson (R-Pa.). and congressional sources and other contacts familiar with some of the likely provisions to be included in the Chairman’s mark coming either the week of May 13 or May 20. As with anything from Congress, changes are possible when the official text is finally released.
· Timing. Once the House GOP text is released, the Ag panel will have a markup session around five days later. The coming rollout will include several Ag Committee documents, including a question-and-answer section of key proposals, echoing education endeavors of some prior farm bills.
· Markup is key. Will any Ag panel Democrats vote for the underlying bill? That is still unclear. Conversations with House Democrat contacts in recent days and weeks paint a picture of disarray as many farm-state Democrats at this juncture were not aware of some of the likely House GOP proposals. Apparently ranking House Ag member David Scott (D-Ga.) has not kept many of his colleagues informed and only until earlier this week discussed the topics at hand with Thompson after the two did not speak with each other for weeks. One top Democrat that is talking with Scott is House Minority Leader Hakeem Jeffries (D-N.Y.). If no Ag panel Democrat approves the markup proposal, that will signal major Democratic opposition when the measure comes to a House floor vote. There will be several House Republicans who will vote against the bill. Much like the recent $95.3 billion foreign aid package, a coalition of Republican and Democrat votes will be needed to get the farm bill off the House floor. Thompson knows this and is likely the reason why he wants bipartisan support for the coming package.
· Why it’s important to get the markup done by June. A new budget baseline will be issued in June by the Congressional Budget Office (CBO). Farm bill writers do not want to have their proposals based on the new baseline because it would take some time to get everything rescored.
· Commodity Credit Corporation (CCC): Thompson has voiced public frustration over the Congressional Budget Office’s (CBO) scoring methods, especially regarding the use of Commodity Credit Corporation (CCC) funds. The CBO has been reluctant to acknowledge any budget savings through the CCC unless strict restrictions are in place. Thompson has sought support from House Budget Committee Chair Jodey Arrington (R-Texas) to ensure the CBO accurately scores agricultural measures. Despite a perceived lack of flexibility in the CBO’s current approach, which only acknowledges $10 billion in discretionary spending, the agricultural sector is skeptical of CBO’s forecast, finding it improbable that a USDA secretary would limit CCC spending to only $1 billion annually given the recent spending out of CCC discretionary funds averages in excess of $10 billion per year.
Note: A recent Southern Ag Today article (link) noted that since the Ag Secretary’s discretionary authority was restored back in 2018, USDA has averaged $10 billion per year in discretionary use of the CCC. Contrast that with the $10 billion total over 10 years that CBO had been projecting.
· A potpourri of farmer-friendly changes could be included. These include:
— Reference prices: Variable increases are coming as we have reported for weeks. During an AgriTalk interview (link), Thompson was asked if his Chairman’s mark proposed different percentage increases for different row crops that range from wheat, corn, soybeans, cotton, and rice to peanuts, lentils, and chickpeas. Would farmers rebel at uneven increases? asked host Chip Flory. “I would hope not, because equity should be based on what you need, not what you want,” replied Thompson. “You know the different commodities are in different states and they always have been, and so equity should be based on … providing what each of these individual commodities need.”
Raising reference prices also have impacts on the effective reference price formula and that will have a positive impact on support for corn which may see a lower percentage boost in reference prices relative to some other program crops.
— ARC program: Some changes to the Title I program option are likely.
— Base acres: Sources say Thompson is trying to thread the needle on the politics and regionality of base acres by setting existing base acres aside and not making further changes, while also providing an opportunity for farmers to get base assigned to their farm if their recent planting history exceeds the number of base acres on the farm. The total number of acres that would be added is still in flux but will likely land in the 20-30 million range, picking up a significant number of acres that are currently ineligible for ARC/PLC.
— Conservation: Thompson said that “all conservation practices are climate-smart,” so “we will be removing some of those guardrails” that constrain the use of climate funding. Funds for conservation from the Inflation Reduction Act (IRA) will be incorporated into the farm bill baseline, but without the IRA’s stringent conditions. This move signals an intention to give states more leeway in deciding the use of conservation funds.
Meanwhile, adjustments are anticipated for the Conservation Reserve Program (CRP), USDA’s longstanding conservation initiative, to increasingly target marginal farmland and acres, potentially through modified (higher) incentives for the most marginal acres.
— SNAP/food stamps. Rep. David Scott has charged Thompson’s package crossed a red line by including a provision that would reduce SNAP outlays by $30 billion in the future and by limiting the administration’s authority to use a $30 billion USDA reserve. “Do we want to jeopardize our best chance to fix an outdated farm safety net over an ideological obsession with cutting SNAP benefits?” wrote Scott. Thompson is reasserting congressional authority and is ensuring no administration can arbitrarily increase or decrease the benefit based on ideology. During his AgriTalk interview, Thompson said he hoped to change the minds of Scott and other Democrats. Interestingly, no one is talking about the massive reinvestment Thompson is making in Title IV.
Of note: Most of the Thrifty Food Program (TFP) savings will be plowed back into improving benefits and access for current participants. They are essentially reprogramming 2% of SNAP to make sure that Congress is back in the driver’s seat when it comes to expanding or reducing SNAP in the future. One farm bill analyst asks: “Would Democrats walk away from that?”
— Crop insurance: Increased incentives to buy up crop insurance levels and a boost in the subsidy to buy SCO policies with language like a recent bill pushed by Sen. John Hoeven (R-N.D.) are likely. There will be an advisory panel recommendation relative to developing or enhancing specialty crop policies.
— Trade: An increase, perhaps even a doubling, of trade promotion funding (MAP, TAP/Trade Assistance Program) from year one of the bill.
— Dairy: Improvements to the Dairy Margin Coverage program are likely, and relative to the milk marketing orders, there will likely be some changes on mandatory cost studies and other language to help USDA administer the program. USDA has already completed the milk marketing order hearing process, but details will not be known until July 1 so House farm bill writers were likely doing an awkward dance not knowing what USDA would unveil.
— Lawmakers are confronting the contentious aspects of California’s Proposition 12 and Massachusetts’ Question 3. Thompson is seeking to include provisions allowing states to set their own livestock raising standards, while ensuring these regulations do not impact practices across state lines.
— Cotton: Enhancing or increasing support for the textile mill program to help prevent the offshoring of the U.S. textile industry. The payment rate hasn’t changed since 2012, so a slight bump is likely. Also, a few minor tweaks to how cotton loan redemption works.
— The Livestock Disaster Program will also be enhanced. Subject to change, one item under review is a livestock indemnity payment rate for an unborn animal. This makes sense because relative to the recent big fires that hit the Texas panhandle, the death count was around 10,000. A lot of those animals were bred heifers that had not yet calved. So, a possible change would allow a payment for that unborn animal — perhaps 85% of the youngest calf rate.