Republicans on the House Agriculture Committee are proposing to raise Price Loss Coverage reference prices by 10% to 20% depending on the commodity, while also providing increased income protection to growers under the Agriculture Risk Coverage program and crop insurance, according to a section-by-section summary released Friday.
The 38-page summary, which is considerably more detailed that an outline the committee issued May 1, also says the draft bill would provide a one-time opportunity for farmers to obtain base acres needed to qualify for payments under the PLC and ARC programs. The update would be determined by plantings from 2019 through 2023.
The ARC guarantee would be increased from 86% to 90% of benchmark revenue, under the draft bill. The maximum payment rate would be raised from 10% to 12.5%.
PLC triggers payments when the average market price for a commodity is below the reference price for the year. ARC triggers payments when county or individual revenue falls below a rolling five-year average.
The summary doesn’t specify the PLC reference price increases for individual commodities, but says the higher rates would be based on “an analysis of the average annual increase in per-unit cost of production” since they were first set in the 2014 farm bill.
The draft bill also would sweeten crop insurance options for farmers by boosting premium subsidies on the Supplemental Coverage Option from 65% to 80% and raise the top coverage level from 86% to 90%.
As expected, the bill also would bring Inflation Reduction Act conservation funding into the bill, remove the restrictions that limit that money to being used for climate-smart practices, and help pay for modifications to the Conservation Reserve Program, reauthorize funding for feral swine eradication, and create a new Forest Conservation Easement Program.
The summary continues to draw some sharp distinction with a draft bill for which Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., released a detailed summary on May 1.
For example, Stabenow is proposing to raise PLC prices by 5% for just three commodities – cotton, peanuts and rice.
The base update in Stabenow’s bill would be limited to “underserved” producers, while the House bill would make it available to “any producer whose planted acres exceed existing base, regardless of demographics or socially disadvantaged status,” according to the summary.
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Stabenow also is seeking to tighten farm program payment limits, while the House bill would appear to loosen them.
Stabenow also has insisted on keeping the climate guardrails on the IRA funding and has strongly opposed a key money-saving provision in the House bill that would restrict how USDA can conduct future updates of the Thrifty Food Plan, the model that is used to project the cost of moderate-cost diet. The TFP is used to set benefit levels in the Supplemental Nutrition Assistance Program.
In an open letter that accompanied the section-by-section summary, House Agriculture Committee Glenn “GT” Thompson, R-Pa., said the bill was “near finalized” but that he was open to making additional modifications ahead of the committee’s planned votes on May 23.
“I have long been clear in my intent: any farm bill must align the farm safety net with the needs of producers, make long-term investment in locally led, voluntary, incentive-based conservation practices, expand market access and trade promotion opportunities, strengthen program operations to demand transparency and accountability to the taxpayer, revitalize rural communities and economies, and reinforce not only the importance of helping our neighbors in need, but doing so without indiscriminate expansion of our nutrition safety net,” he said.
Here are additional details on the bill:
Title 1: Commodity programs
Marketing loan rates for most commodities would get “modest” increases, and the administration of the tariff-rate quota for sugar and marketing allotments for sugar beet processors would be “modernized,” under the bill.
For dairy producers, the Tier 1 coverage level for the Dairy Margin Coverage program would be increased from 5 million to 6 million pounds. Producers also could update their production history, and there also would be a 25% premium discount on DMC premiums for farmers who enrolled in the program for the duration of the farm bill.
In a victory for the National Milk Producers Federation, the bill also would restore the formula previously used for pricing milk under federal milk marketing orders, until possible modifications are ratified following an ongoing USDA review. The 2018 farm bill changed the formula.
Disaster aid programs would be expanded in part by creating standing authority for any future ad hoc assistance to be provided via block grants to states. Such assistance is currently delivered by USDA. The payment rate for the Livestock Indemnity Program would be increased to 100% of the fair market value of the animal, if it’s killed by a federally protected species. There also would be a new supplemental payment for the loss of unborn livestock.
To ease commodity program payment rules, the draft House bill “streamlines the administration of payment limitations for certain entities like LLCs and S-Corps and provides for an inflation-adjusted limitation if an operation derives 75% or more of its income from farming, ranching, or forestry,” the summary says. Operations also would be eligible for disaster programs if at least 75% of their income comes from agriculture.
Title 2: Conservation programs
The bill would revise the Conservation Reserve Program’s rental rate structure, basing it on a “land capability” classification system utilized by NRCS. Soil types less suited for cultivation — which range between classes three and seven on the scale — would see higher rental rates.
The summary says the bill “maintains an acreage cap” for CRP, but does not specify what this is. Stabenow’s draft bill would gradually raise the cap to 29 million acres.
The CRP payment limitation would be raised from $50,000 to $125,000 per year under the bill. and the legislation would formally allow cost-share payments for “establishing vegetation, stabilizing vegetation for erosion control, installing fencing, adopting practices to exclude livestock from riparian areas, implementing fencing and water practices to transition to grazing on grasslands, allowing mid-contract management for permanent cover, and implementing water quality conservation practices.”
The Environmental Quality Incentives Program — a popular program paying farmers to implement new environmental practices, like cover crops, no-till and prescribed grazing — would keep a 50% carve-out for livestock-related projects and a 10% allocation for wildlife habitat projects.
Precision agriculture technologies would be made eligible for payments under EQIP and the Conservation Stewardship Program.
The bill would require USDA to “streamline” agreements through the Regional Conservation Partnership Program with new timelines for administrative actions and decisions. The agency would have 180 days to approve agreements and 30 days to pay partners, according to the summary.
USDA also be required under the draft bill to revise conservation practice standards more frequently, while also creating a system allowing for “public participation” in the process. The bill also aims to bolster USDA staffing by modifying the Technical Service Provider certification process, continuing the agency’s experienced services program, and providing the agency with direct hire authority.
Title 3: Trade programs
The House bill would double funding for the Market Access Program and Foreign Market Development programs, which are used to promote the sale of U.S. commodities overseas. The bill also would require that 50% of Food for Peace funding be used for purchasing of U.S-grown commodities and paying the cost of shipping them overseas.
Title 4: Nutrition assistance
The draft bill’s nutrition title would assign a “cost neutral process” to determine future updates to the Thrifty Food Plan, the economic model used to estimate the cost of food and set SNAP benefits. The updates would continue to consider food prices, consumption patterns and dietary guidance, according to the summary.
Democrats have pushed back against this provision, arguing it would unfairly cut future benefits. The TFP provision remains a major obstacle to a bipartisan way forward, committee Democrats have said.
The title would also allow people with past drug offenses to receive SNAP benefits. It would also allow SNAP participants to remain in the program throughout career or education transitions. Specifically, it would direct USDA to issue guidance to states on how to notify college students eligible for SNAP and ensure the income of individuals through the age of 21 and in secondary school is not used against total household eligibility.
Title 5: Credit
The draft raises limits on USDA direct and guaranteed loans and indexes them to provide for further increases. The limit on guaranteed operating loans would be raised to $3 million and indexed to the Consumer Price Index. The cap on guaranteed ownership loans would go to $3.5 million and be indexed to land values.
Other caps in the bill: direct operating loans, $750,000; direct ownership loans, $850,000 and microloans, $100,000.
The bill would enable Farm Credit institutions to “partner with community banks and other lenders in financing essential community facilities such as those providing healthcare, childcare, and emergency services.”
Title 6: Rural Development
The ReConnect grant and loan program for rural broadband would get a home in the farm bill by merging it with an existing broadband program. ReConnect, which was started as a pilot program through an annual appropriations bill in 2018, is targeted to populations in areas deemed “rural” by the USDA and requires that at least 90% of the households in proposed project areas have download speeds slower than 100 megabits per second downstream and upload speeds below 20 Mbps.
The new ReConnect Rural Broadband Program, with a proposed authorization at $350 million per year, would provide loans or loan guarantees in places where 75% of the proposed service area lacks 50/25 Mbps. speeds and grants where 90% of the proposed service area lacks those speeds. Buildout projects would be required to provide speeds between 100/50 and 500/250 Mbps, depending on the length of the agreement.
To improve heatlh care, the bill would establish a program providing technical assistance for rural providers and create a program allowing some facilities to “refinance certain debt obligations contingent upon its commitment to undergoing financial and managerial planning aimed at improving the long-term viability of the institution.”
The bill also would create a 3-year USDA “rural childcare initiative,” under which the agency would be required to prioritize childcare-focused projects through the Community Facilities Program, the Business and Industry Loan Guarantee Program, the Rural Microentrepreneur Assistance Program, and the Intermediary Relending Program.
Title 7: Research
The bill would add $1 billion in mandatory funding for the competitive grant program that was established in the 2018 farm bill under the Research Facilities Act, and increase mandatory funding for the Specialty Crop Research Initiative to $175 million annually, a $95 million boost. USDA also could waive the matching funds requirement in the SCRI.
From the SCRI funds, the bill would allocate $20 million for R&D of mechanization and automation technologies as part of a new Specialty Crop Mechanization and Automation Research and Extension Program, a high priority for specialty crop producers.
The bill would provide $100 million in mandatory funding for scholarships for students at 1890 institutions, as well as other support, including increases in appropriations authorizations for the institutions.
The bill would reauthorize the Agriculture and Food Research Initiative, the Agriculture Department’s principal competitive grant program, and “refines priorities to ensure the program reflects the current needs of the agriculture industry.” The summary then provides examples of the kind of work AFRI should be funding, such as development of regionally adapted cultivars and breeding for environmental resilience.
Title 8: Forestry
The bill would “expand, streamline and create new public-private partnerships to encourage active forest management and enhance forest health.”
The legislation would authorize counties and tribes “to retain and use timber sale receipts on land covered by [a Good Neighbor Agreement].” It also would direct the ag secretary to develop “a strategy to use livestock grazing as a wildfire risk reduction strategy on federal land.”
Broadly, the bill would “create new and enhance existing market opportunities for forest products, including leveraging data sources and tools, investing in innovative wood products, and expanding the use of biochar.”
Title 9: Energy
The Rural Energy for America Program, which funds renewable energy and energy efficiency projects, would have its maximum loan guarantee raised to $50 million. The federal cost-share would be increased to to 50% for beginning socially disadvantaged and veteran producers. All other grantees could receive a 35% guarantee,
The bill would direct USDA to issue procurement guidance to agencies for the BioPreferred program. The bill would also direct agencies to create North American Industry Classification System and North American Product Classification System codes specifically tailored towards the biobased product industry, to allow agencies to better track procurement of these products.
The bill would designate sustainable aviation fuel as an advanced biofuel under USDA energy programs.
Title 10: Horticulture title (specialty crops, organic agriculture, local and regional agriculture)
The draft bill would increase the mandatory funding level for the Specialty Crop Block Grant Program to $100 million annually, which is a $15 million increase from the 2018 legislation. It would also increase funding levels for the Plant Pest and Disease Management and Disaster Prevention Program to $90 million per year, and maintain funding levels for the Local Agriculture Market Program.
The horticulture title would expand eligibility for the Farmers’ Market and Local Food Promotion Program and simplify applications to the program for some categories.
The bill would also reauthorize and maintain funding for several organic programs like the National Organic Certification Cost-Share and National Organic Program.
Title 11: Crop insurance
In addition to increasing the coverage level for SCO policies, the bill also would make more producers eligible for beginning farmer premium discounts. The definition of a beginning farmer would be increased from five years to 10 years.
The bill wold create a specialty crop advisory committee for USDA with as many as 10 members, at least five of whom would be producers from around the country. The chair of the group would have a seat on the Federal Crop Insurance Corp. board. The committee would be authorized to prioritize research and development for sector policies.
Title 12: Miscellaneous title
The bill would bar states and local governments from imposing, “directly or indirectly, as a condition for sale or consumption, a condition or standard on the production of covered livestock unless the livestock is physically located within such state or local government.” The provision is aimed at blocking state laws such as California’s Proposition 12.
The bill contains several provisions to tighten tracking foreign purchasing of U.S. farmland. The bill would impose a minimum penalty for anyone who fails to submit or falsifies a report to USDA. The bill also would require USDA to adopt recommendations made by the Government Accountability Office for improving the department's tracking of purchases.
USDA also would be directed by the draft bill to “to conduct a report on their preparedness to support livestock producers and poultry growers facing economic losses in the event of a foreign animal disease outbreak.”
