The House Republican farm bill has drawn Democratic anger over its reforms to food stamps, but the legislation also would make significant changes in policy and funding across many other sections, including conservation, rural development and horticulture.
The bill includes many provisions that would be relatively noncontroversial, including enhancements to the Price Loss Coverage program, the first updates to USDA farm lending limits in 16 years and full funding for trade promotion programs and specialty crop assistance.
But House Agriculture Chairman Mike Conaway has set up a number of issues, both large and small, besides nutrition, for tough negotiations with the Senate. Among them: His bill would eliminate the Conservation Stewardship Program, saving $12.6 billion to use for other priorities; expand the Conservation Reserve Program; and defund energy programs as well as some other programs that benefit small-scale or organic agriculture.
The unfunded energy programs, including biorefinery assistance, happen to be high priorities for the top Democrat on the Senate Agriculture Committee, Debbie Stabenow of Michigan.
Stabenow told Agri-Pulse the House bill is “not even close” on many Senate priorities, including support for farmers markets as well as the energy programs. “We’re just going to write our own (bill) and then we’ll have to figure it out,” she said.
Conaway said he knew his bill wouldn’t get to President Trump’s desk intact: “A lot of modifications are going to happen.”
Bob Young, a former economist for the American Farm Bureau Federation, said bills such as this are drafted to set priorities and establish negotiating positions. "It also is frequently the case that you don't fund things you know are important to the other side ... in order to ensure the other side has to give up on other points to get their things back in the final package," he said.
Here is a title-by-title analysis of key changes in the bill:
Title I. COMMODITY
The bill would rework dairy’s Margin Protection Program, newly enhanced by the fiscal 2018 omnibus spending measure, while improving PLC for some farmers. PLC now includes cotton, a provision added by the omnibus.
PLC. An escalator provision would raise reference prices whenever the moving five-year olympic average of commodity prices rises 15 percent above the reference price. Soybeans is the commodity most likely to be affected.
Producers who experienced severe drought from 2009-13 would be allowed to update their PLC yields. Cotton growers appear to benefit the most from the change. The Congressional Budget Office estimates they would get an additional $577 million over 10 years due to the bill’s modifications.
Agriculture Risk Coverage. Yields would be based on Risk Management Agency data. Commodity revenue would be separately calculated for drylands and irrigated acreage. ARC coverage also would be based on the county where a farm is physically located.
Dairy. Provisions put in the bill by the House committee’s top Democrat, Collin Peterson of Minnesota, would add higher coverage levels – $8.50 and $9 per hundredweight – for the first 5 million pounds of production. To offset the cost of that change, premiums would be reinstated at the $4.50 and $5 levels.
Payment limits. The bill would allow members of LLCs and S corporations to individually qualify for up to $125,000 of crop subsidies annually. Under current law, the entire entity is limited to $125,000 a year. The bill also would add cousins, nieces and nephews to the list of a farmer’s family members who can be eligible for commodity programs.
Outlook: The payment limit provisions are likely to be attacked on the House floor. Sen. Chuck Grassley, R-Iowa, is pushing to tighten provisions in the 2014 farm bill. In the past he has received significant support on the Senate floor.
Peterson’s MPP overhaul would undo changes put in the omnibus by Stabenow and Vermont Sen. Patrick Leahy, the ranking Democrat on Senate Appropriations.
Title II. CONSERVATION
Eliminating CSP is not only a policy priority for Conaway, it also releases $12.6 billion that he could spend on other priorities. Some $7.7 billion would go toward expanding the Environmental Quality Incentives Program.
EQIP would begin offering CSP-like, long-term incentive payments for improvements in farming practices, but the number of resource concerns to be addressed would be narrowed from what CSP currently targets. Infrastructure projects on concentrated animal feeding operations could qualify for stewardship contracts for the first time.
But the bill would eliminate the 60 percent funding set-aside for livestock producers that EQIP currently has. Total EQIP funding, including for stewardship contracts, would be increased to $2 billion in 2019 and $3 billion by 2023.
CRP. Peterson added provisions increasing the acreage limit from 24 million to 29 million. The cost of the increase would be offset in part by capping payments at 80 percent of local rental rates. The bill also would reduce the federal cost share for establishing conservation practices on CRP acreage.
ACEP. Using the CSP savings, the bill would increase funding for the Agricultural Conservation Easement Program to $500 million per year. The 2014 farm bill created ACEP by combining, and reducing funding for, the Wetlands Reserve Program, Grassland Reserve Program, and Farm and Ranch Lands Protection Program.
RCPP. The Regional Conservation Partnership Program, now funded out of CSP and EQIP, would get its own funding source at $25 million a year.
Outlook: Critics say the bill shifts away from working lands conservation, and there are likely to be sharp differences with the Senate on this title. Senate Agriculture Chairman Pat Roberts, R-Kan., has shown no interest in eliminating CSP, and four members of the committee led by Joni Ernst, R-Iowa, introduced a bipartisan bill called the GROW Act to bolster the program.
Roberts faces sharp differences on his committee on expanding CRP: Sen. John Thune of South Dakota wants to expand CRP, but the GROW Act would freeze the program at 24 million acres.
Title III. TRADE
USDA’s trade programs, including the Market Access Program and Foreign Market Development, would be combined under a new International Market Development Program funded at $255 million per year. The bill would guarantee $200 million in annual funding for MAP and no less than $34.5 million for FMD, $10 million for the Emerging Markets Program and $9 million for Technical Assistance for Specialty Crops Program.
Only MAP would have funding after this year under the expiring 2014 farm bill. Combining the programs would ensure all of the programs have a permanent funding baseline.
Food for Peace. The bill would require agencies to ensure that providing food aid in the form of cash and vouchers won’t disrupt markets in the countries where the assistance is distributed. Such analysis is now required only for distribution of commodities.
Outlook: Likely to be one of the least controversial sections of the bill.
Title IV. NUTRITION
This is unquestionably the most controversial part of the House farm bill. Leaders of the Senate Agriculture Committee have made clear that their bill won’t consider any of these major reforms that House Republicans are proposing. The question is to what extent Conaway and retiring House Speaker Paul Ryan will insist on including some reforms in a final bill, if negotiations get that far this year. There doesn’t seem to be much middle ground.
Here are the key reforms in the House bill:
-It requires all work-capable adults under age 60, including parents of children older than 6, to work or be in an approved training program at least 20 hours a week. Under current law, that work requirement applies to able-bodied adults without dependents. These ABAWDs can be unemployed three months in every three years.
-It eliminates “broad-based categorical eligibility,” which allows states to enroll people with incomes as high as twice the federal poverty level in SNAP. The income limit nationwide would be 30 percent more than the federal poverty level. The bill does, however, increase asset limits and allow recipients to have as much as $2,000 in a savings account.
-The bill eliminates the standard utility allowance used to determine benefit eligibility. SNAP recipients would have to submit actual bills.
A large portion of those savings, about $11 billion, is put into ramping up employment and training programs – which anti-hunger groups say isn’t enough money to have a significant impact – and into child support enforcement so individuals who don't pay their child support payments would no longer be eligible for SNAP.
But the bill includes several provisions that on their own would appeal to Democrats. The SNAP earned-income deduction is increased by 10 percent at a cost of $4.6 billion. An additional $1.7 billion would go toward incentives for healthful foods.
Outlook: Ryan is recruiting conservative support for the bill, knowing that Democrats will be unified in opposition. On Monday he pitched the legislation to the Heritage Foundation, National Taxpayers Union and other conservative groups.
Title V. CREDIT
This section increases the maximum allowable indebtedness for both guaranteed farm ownership loans and guaranteed operating loans from $700,000 to $1.75 million, starting in 2019. That would be the first update to the limits in 16 years.
Farm Credit System. The acreage limitation on certain loans would increase from 1,000 to 2,000 acres. The Farm Credit Administration would first have to study the feasibility of the increase. Under existing law, Farmer Mac has had to finance larger farms by breaking up mortgages into multiple pieces of no more than1,000 acres each.
Beginning farmers: Maintains the Beginning Farmer and Rancher Individual Development Accounts Pilot Program.
Outlook: One of the least controversial titles.
Title VI. RURAL DEVELOPMENT
There could be a big fight with the Senate over this title - but over money, not necessarily policy.
This section puts a priority on funding rural broadband development, building on a $600 million pilot program funded through the FY18 omnibus spending bill to fund grants and loans to internet service producers. The bill would authorize $150 million in broadband lending, which equates to about $1 billion in loans, along with $350 million in grants
USDA also would be required to set a minimum acceptable standard of broadband service and project minimum acceptable standards of service for five, 10, 15, 20, and 30 years into the future.
The bill also includes provisions to spur the development of agricultural association health plans, which could benefit farmers and others in rural America. USDA would be authorized to make more than 10 loans for establishing such plans and also provide grants to assist their development. There is no money set aside for the assistance but appropriators could spend as much as $65 million.
Much of this section essentially challenges the Senate Agriculture Committee to come up with funding for a number of other programs, including those in the 2014 farm bill’s energy title, which Conaway’s bill would eliminate.
The programs that have no mandatory funding in this bill include value-added producer grants, which can help smaller scale farmers expand into processing.
The Rural Energy for America Program, which currently has permanent funding baseline, would be zeroed out, saving $435 million that Conaway earmarked for other priorities. Conaway took another $82 million from biorefinery assistance. The Biomass Crop Assistance Program would have no mandatory funding.
Outlook: Conaway is headed for a showdown with Stabenow on this section, but it's not clear what Stabenow will cut to fund them.
Title VII. RESEARCH
The Foundation for Food and Agriculture Research would receive no new funding. The 2014 farm bill established the foundation with $200 million in seed money.
The bill increases funding for the Organic Agriculture Research and Extension Initiative to $30 million a year. It was funded at $20 million a year in the 2014 farm bill. Soil health would be added to the list of program funding priorities.
Outlook: FFAR supporters will be pushing the Senate Agriculture Committee for a new round of funding.
Title VIII. FORESTRY
This section includes provisions of the House-passed Resilient Federal Forests Act to expedite approvals for logging in the national forests through the use of “categorical exclusions.” Projects that could be accelerated include those addressing insect and disease infestation, reducing hazardous fuel loads, protecting municipal water sources and improving or enhancing critical habitat.
Outlook: The forest bill passed the House 232-188 with just 10 Democratic votes, which means Senate Democrats will likely fight these provisions.
Title IX. HORTICULTURE
Pesticides. Environmental groups will fight a provision to speed pesticide approvals and registration reviews by allowing EPA to avoid going through the lengthy Endangered Species Act's consultation process, which requires the Fish and Wildlife Service or the National Marine Fisheries Service to assess a chemical's impact on threatened or endangered species.
The bill includes the House-passed Pesticide Registration Improvement Act, which would reauthorize for seven years the registration and maintenance fees that account for about one-third of the EPA Office of Pesticide Programs’ budget.
Specialty crops. The bill maintains funding at $85 million per year for Specialty Crop Block Grants, which fund state projects to promote fruit, vegetables and nuts.
The bill also provides full funding for the Specialty Crops Research Initiative, including set-asides for citrus research and extension.
Farmers’ Market and Local Food Promotion Program. It would have no mandatory funding, although its authorized spending level would rise from $10 million to $30 million a year.
Organic. The National Organic Certification Cost Share Program, which the 2014 farm bill funded at $11.5 million per year, would be eliminated.
Outlook: Environmentalists already are attacking the pesticide-ESA provision, and funding the farmers’ market provision and organic certification assistance will be priorities for Senate Democrats, setting up another funding difference with the House.
Title X. CROP INSURANCE
The bill would make no significant changes to crop insurance and leaves in place the conservation compliance added by the 2014 farm bill.
ARC restriction. Farmers who elect ARC county coverage would be barred from also carrying area loss or yield policies or the Supplemental Coverage Option. The restriction is intended to address criticism that ARC duplicates crop insurance coverage. An amendment adopted in committee Wednesday would allow ARC participants to continue buying Margin Protection Plans.
Beginning farmers: The bill loosens the definition of a beginning farmer so that someone who has been in business for up to 10 years can qualify for a premium discount for whole farm revenue insurance. The limit’s now five years.
Regional assistance. The Risk Management Education Partnership program, which educates farmers considered underserved by crop insurance on ways to mitigate risk in their operations, would be eliminated by the bill.
Outlook: The education program is targeted toward regions with a lot of small farmers for whom whole farm revenue insurance is designed. Groups like the National Sustainable Agriculture Coalition will be looking to Senate Democrats to make sure the program continues.
Title XI. MISCELLANEOUS
Vaccine bank: The bill would provide $150 million in one-time funding for a foot-and-mouth disease vaccine bank, which would be part of the bill’s new Animal Disease Response Preparedness and Response Program. The industry wanted $150 million in annual funding. The animal health program would be modeled after the existing Plant Pest and Disease Management and Disaster Prevention Program.
USDA Reorganization. The bill authorizes a key part of Agriculture Secretary Sonny Perdue’s reorganization plan, which consolidates the Natural Resources Conservation Service under a new Farm Production and Conservation mission area. The Farm Service Agency and Risk Management Agency are also under FPAC.
Future farmers. The bill would establish a Commission on Farm Transitions-Needs for 2050 to study issues affecting the transition of farmers to the next generation of producers.
Food waste. The bill would create a Food Loss and Waste Reduction Liaison at USDA to coordinate programs for measuring and reducing food waste.
Outlook: Although the livestock industry wanted a lot more money for vaccines, funding that request was always going to be hard for the committees to do, given all the demands on them for money.
CLICK HERE for the House farm bill text.
CLICK HERE for the section-by-section summary of the bill.
CLICK HERE for the CBO score.
