Senators on both sides of the aisle used a farm bill hearing Thursday to call for addressing the rising input costs faced by row crop producers and expanding crop insurance options for fruits, vegetables and other specialty crops.
“There are still gaps in the farm safety net as farmers continue to face global market uncertainty and climate-fueled weather disasters,” said Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich. “While many commodity prices are at historic highs, we also know that land, fertilizer, and input costs are also near record highs.”
She stressed she will be focused during the upcoming farm bill debate on “expanding and strengthening crop insurance for all farmers — including specialty crop growers, organic producers, beginning and diversified farmers. Farmers must have the opportunity to start, sustain, and expand their operations.”
One of the committee's most junior Democrats, Raphael Warnock of Georgia, also pushed senior USDA officials on the importance of crop insurance for specialty crops.
“Fruit and vegetable growers in Florida and throughout Southeast have limited, viable options when it comes to insuring their crops and against natural disasters. And Georgia growers are already struggling with market challenges, lower costs fruits and vegetables imported from other countries,” Warnock said.
Marcia Bunger, the administrator of the Risk Management Agency who farms with her husband in South Dakota, told the senators her goal is to ensure specialty crop growers, urban farmers and organic producers “have the type of policy that my husband and I have had for the last 27 years.”
The committee’s top Republican, John Boozman, stressed the need for lawmakers to address rising crop production costs, which he said had undermined the effectiveness of the Price Loss Coverage program. PLC payments are triggered when market prices for a commodity fall below its PLC reference price.
“Crop prices are likely to decline in the coming years, but prices for many of our major commodities would have to drop sharply before the current … Price Loss Coverage safety net would start to work,” Boozman said.
“Corn prices, for example, would have to decline by 46 percent before farmers would receive help. By the time corn prices fell that low, significant damage would have already been done.”
Other committee members conveyed a similar message. Sen. Tommy Tuberville, R-Ala., told USDA officials “reference prices have not kept up with the rising input costs in agriculture.”
USDA’s Economic Research Service estimates net cash farm income will fall 20.7% from last year’s record as a result of some moderation in commodity prices as well as historically high production costs. Net cash farm income shot up an estimated 27% in 2022.
Robert Bonnie, USDA’s undersecretary for farm production and conservation, acknowledged there is “lots of concern” among producers about the existing reference prices. Provisions in the 2018 farm bill allow the PLC reference prices to rise depending on what happens to commodity prices, but the increases are capped.
“I assume the conversation about those prices will be a part of the debate that Congress has” in writing the next farm bill, Bonnie said.
Also at Thursday’s hearing, Bonnie defended the administration’s use of its Commodity Credit Corp. account to fund projects testing ways to develop markets for “climate-smart” commodities. Bonnie told Sen. Chuck Grassley, R-Iowa, the $3 billion initiative was authorized by the CCC statute, but he said there were no plans to use the CCC for any other new programs under his mission area.
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He told reporters after the hearing that USDA would soon be signing the first contracts to be funded through the Partnerships for Climate-Smart Commodities program.
On other issues, Farm Service Agency Administrator Zach Ducheneaux told Sen. Joni Ernst, R-Iowa, FSA is still relying on a paper-based disclosure program for foreign purchases of agricultural lands, an issue that has gotten increased attention on cable news and with Republicans in Congress.
“We're not a regulatory agency, so we don't have a lot of enforcement tools against foreign owners for not coming in and doing the paperwork,” Ducheneaux said.
Ernst told Ducheneaux that foreign land ownership is a “national security” issue. “We really need to make sure that we do have those resources dedicated to updating our system so that we can find ways of enforcing (the disclosure regulations) much, much easier than what we're able to do now,” she said.
Bonnie raised concerns about FSA's ability to provide disaster relief given its staffing challenges and the number of disasters it has had to address in recent years, from hurricanes in Puerto Rico to wildfires in the West. Congress has also authorized a series of supplemental disaster assistance programs to go with programs included in the 2018 farm bill.
“We're essentially having to build jump teams within FSA to be able to surge staff to those areas,” he said.
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