A compromise farm bill ready for final congressional votes melds a variety of Senate and House improvements to the major commodity programs, boosts spending on several major conservation programs while also creating a new $30 million a year program to fight animal diseases.
The 540-page bill also funds trade and energy programs whose accounts had expired and requires the White House to nominate an undersecretary for rural development, a position that Agriculture Secretary Sonny Perdue eliminated in an reorganization plan he unveiled in 2017.
The farm bill conference agreement, filed late Monday, could be on the House floor for a final vote that is likely to come Thursday, said House Agriculture Chairman Mike Conaway, R-Texas. Timing of the final Senate vote was less certain and could slip into next week.
“For the psyche of rural America, this is a really good bill." said Conaway. "With all the trade uncertainties and commodity prices where they are, another double-digit drop-in farm income, this is a real boon [and] a shot in the arm for rural America. This is positive.”
The compromise bill omits, as expected, a couple of priorities for House Republicans and the Trump administration: tighter work requirements for the Supplemental Nutrition Assistance Program and broader new forest management authority for federal lands.
That is expected to cost the bill GOP votes, but the top Democrat on the House Agriculture Committee, Collin Peterson of Minnesota, said he expected the measure to have more Democratic support than the farm bill enacted in 2008, when the House was under Democratic control.
The top Democrat on the Senate Agriculture Committee, Debbie Stabenow of Michigan, said the final bill was “an important balance between the farm safety net and the family safety net and some really important investments to continue conservation as a risk management tool for farmers.”
A key new provision crafted by the farm bill negotiators will allow a one-time chance in 2020 for producers who have experienced serious yield losses in past years to update their yield data used to calculate Price Loss Coverage benefits. The provision includes a formula to exclude the impact of increases in national trend yields. For any year in which the farm yield was less than 75 percent of the county average for 2013‐2017, the farmer will be allowed to claim a yield of 75 percent of the county average.
The provision replaces a controversial portion of the House-passed farm bill that allowed yield updates only for producers who had problems with drought during the period used for calculating yields when the programs were created in the 2014 farm bill.
Among other key commodity program provisions of the final bill:
-Farmers would be allowed to switch between the Agriculture Risk Coverage and Price Loss Coverage programs starting in 2019 and again in 2021, 2022 and 2023.
-The bill leaves PLC reference prices at their current levels but includes an escalator provision from the House-passed bill that would raise them if the five-year, Olympic moving average rises significantly above the reference levels. The prices would be capped at 15 percent above the statutory rates. “In the near term this isn’t going to do much,” but “once the market does rebound” reference prices can follow, said a House aide.
-Most farmers now in ARC are expected to enroll in PLC, but the bill modified some ARC enhancements in the Senate-passed bill. The bill would modify ARC guarantee calculations to allow a substitute “transitional” T-yield of 80 percent of the county T-yield, an increase from the 70 percent now allowed. The 25 largest counties could be subdivided for calculating ARC coverage, which is based on fluctuations in county revenue. Yields would be based on Risk Management Agency data, and separate yields would be calculated for irrigated and non-irrigated land in each county.
-Farmers who have kept base acres in grass for the past decade would no longer receive PLC or ARC payments for the life of the new bill, but as compensation they could enroll the land in the Conservation Stewardship Program for five years for an annual payment of $18 an acre. Ending payments on unplanted base raised money for other provisions.
-Marketing loan rates would be increased by varying amounts. The rate for soybeans will rise by 24 percent from $5 a bushel to $6.20. For corn, the loan rate would rise to $2.20 per bushel, up from $1.95. For wheat, the rate would go from $2.94 per bushel to $3.38. Payment limits on marketing loan gains and loan deficiency payments will be eliminated.
-Dairy producers’ Margin Protection Program was overhauled (and renamed Dairy Margin Coverage) to make it more attractive to smaller-scale producers, those with production of 5 million pounds or less per year, the equivalent of 240 cows. Premiums would be reduced even below the lower levels set by this year’s budget agreement and producers and the maximum coverage level would be raised from $8 per hundredweight to $9.50.
Larger producers would be encouraged to buy a catastrophic level of coverage, $5 per hundredweight, which would be offered for a minimal fee.
Producers who lock in coverage for 5 years under the new DMC program would get a 25 percent discount on their premiums.
-Sugar producers will get a loan rate increase of 1 cent per pound for cane sugar and 1.28 cents for beet.
CSP was also at the center of a lengthy battle between Conaway and Stabenow. It survived as a standalone program but will be cut significantly to pay for increasing other programs as well as compensating landowners losing ARC and PLC payments on unplanted base. The House bill would have folded CSP into the Environmental Quality Incentives Program.
New CSP incentive payments for cover crops, rotational grazing and other practices that protect water quality, but the current acreage authorization, now 10 million acres, would be eliminated and funding cut from $1.8 billion annually to $1 billion a year.
EQIP would be increased by $275 million to push its annual funding above $2 billion and up to half of the money could be used for livestock operations.
Because of the cut to CSP, the Agricultural Conservation Easement Program would be funded at $450 million a year, while the Regional Conservation Partnership Program would get $300 million annually.
The Conservation Reserve Program would be expanded from 24 million to 27 million acres, with 2 million acres reserved for grasslands. The increase would be paid for by capping payment rates to keep them below local rental rates and by trimming some incentives to landowners.
The biggest single priority in terms of a new program for livestock groups was the animal disease and preparedness program, including a vaccine bank, which was provided $150 million in guaranteed funding over the life of the five-year bill.
Among the biggest losers in the final bill are the nation’s rural electric cooperatives, whose Cushion of Credit escrow account was tapped to provide $2.5 billion in funding for a variety of other programs in the farm bill. Electric co-ops will continue to earn 5 percent on their deposits for two years, but that would then be cut sharply. .
The conference report doesn’t include Senate provisions backed by the AGree Initiative that would have required USDA to make data available to researchers on farm and conservation programs and crop insurance. Concerns about keeping the data private ultimately sank the effort, aides said.
Instead the final bill would direct USDA to report to Congress on privacy issues and on the data that it currently maintains. The USDA will lay ”the groundwork for future discussions,” a House aide said.
Perdue issued a statement urging Congress to pass it quickly.
"This legislation maintains a strong safety net for the farm economy, invests in critical agricultural research, and will promote agriculture exports through robust trade programs. While we would have liked to see more progress on work requirements for SNAP recipients and forest management reforms, the conference agreement does include several helpful provisions and we will continue to build upon these through our authorities," he said.
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