Ongoing partisan battles over nutrition assistance and Inflation Reduction Act funding have received all the attention but there are plenty of other policy disagreements in the approaches that leaders of the House and Senate Agriculture committees are taking on a new farm bill.
Neither House Agriculture Committee Chairman Glenn Thompson, R-Pa., nor Senate Ag Chairwoman Debbie Stabenow, D-Mich., has released the text of their respective draft bills. But detailed summaries they have issued in the past weeks show a range of differences large and small that will have to be negotiated if the committees are able to finish a bill this year.
Disagreements include Price Loss Coverage reference prices; farm program eligibility and payment limits; compensation for crop insurers; federal milk marketing order reform; Stabenow’s proposal to permanently authorize conservation programs; Thompson’s provision aimed at blocking states such as California from regulating livestock standards for farmers in other states; and Stabenow's provision to create an Office of the Special Investigator for Competition Matters at USDA to investigate and prosecute violations of the Packers and Stockyards Act.
Here’s a look at key differences, and some significant policy similarities, within the draft bills Thompson and Stabenow are developing:
COMMODITY PROGRAMS
Price Loss Coverage: Funding availability aside, there is a philosophical difference on whether PLC reference prices need to be raised to account for increases in input prices. The House bill would raise reference prices by 10% to 20%, depending on the commodity. Stabenow says her bill would provide increases of 5% for cotton, peanuts and rice. Stabenow has consistently argued that the escalator provision in the 2018 farm bill is already raising effective reference prices for many commodities; the effective reference price can rise up to 15% above the statutory reference price depending on the average market price for the previous five years.
Base update: The House bill would provide farmers a one-time opportunity to obtain base acres needed to qualify for payments under the PLC and Agriculture Risk Coverage programs. The update would be available to “any producer whose planted acres exceed existing base, regardless of demographics or socially disadvantaged status.” The update in Stabenow’s bill would only allow “underserved” producers to get new base.
Dairy: Thompson and Stabenow are closely aligned on the Dairy Margin Coverage program. Both would increase Tier 1 coverage from 5 million to 6 million pounds of milk annually and allow farms to update production histories. But the House bill also would reinstate a 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: The House bill would authorize future ad hoc assistance to be provided via block grants to states. USDA now delivers such assistance when Congress appropriates funds. The Senate bill would authorize a permanent program for USDA to run when money is appropriated.
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Payment limits: The House bill summary lacks key details but says the legislation “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.” Any operation would be eligible for disaster programs if at least 75% of its income comes from agriculture. Stabenow’s bill would restrict farm program payments to individuals and entities with no more than $700,000 in adjusted gross income (down from the current limit of $900,000), except for specialty crops where the AGI cap would be $1.5 million. There would be AGI exemptions for disaster programs. Her bill also would bar payments on foreign-owned farmland.
SPECIALTY CROPS
Both bills would increase the mandatory funding level for the Specialty Crop Block Grant Program to $100 million annually, a $15 million increase from the 2018 farm bill.
The House bill would increase mandatory funding for the Specialty Crop Research Initiative to $175 million annually, a $95 million boost, and would allocate $20 million for research and development of mechanization and automation technologies in a new Specialty Crop Mechanization and Automation Research and Extension Program. The Senate bill would give SCRI $130 million a year with up to $10 million allocated to mechanization and automation R&D.
CROP INSURANCE
Both bills would encourage farmers to buy higher area-based crop insurance levels through the Supplemental Coverage Option. Both measures raise premium subsidies from 65% to 80%. The House bill would raise the top coverage level from 86% to 90%. Stabenow's would go to 88%.
Beginning farmers: Both 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. Under the Senate bill, the premium discount would be as high as 15% for the newest farmers.
Discounts: In addition to assistance for beginning farmers, the Senate bill would would provide a federal matching share of $5 an acre for state cover crop payments. The Senate bill would tell USDA to consider discounts for cover crops, crop rotation, precision irrigation and fertilization.
Sodsaver: Under the Senate bill, the current reduction in benefits for breaking up native sod in the Prairie Pothole region would be extended nationwide.
Crop insurers: The House bill would provide inflation adjustments for the cap on insurance companies’ administrative and operating (A&O) expenses, which include agent fees. The Senate bill would set a “limitation on the combined total amount of reimbursements” for A&O and would provide for 2% growth in the cap annually to account for inflation. The Senate bill would set minimum A&O levels for sales of policies that require more work for agents, including Whole Farm Revenue Protection. A&O for area-based policies would be reduced under the Senate bill.
CONSERVATION PROGRAMS
The biggest difference between the House and Senate bills is how they treat Inflation Reduction Act (IRA) funding that would be brought into the legislation and used to permanently increase baseline conservation program spending. Thompson wants to remove the IRA's requirement that the money be used for climate-related spending. For Stabenow that’s a red line.
In another key difference, Stabenow wants to permanently authorize conservation programs, removing them from the need to be periodically reauthorized in farm bills. Crop insurance is already permanently authorized, while commodity programs are not.
CRP: Stabenow would increase the acreage limit on the Conservation Reserve Program from 27 million to 29 million acres. Thompson has not said what the cap should be. The House bill would raise the CRP payment limit from $50,000 to $125,000 per year.
EQIP: The Environmental Quality Incentives Program would retain a 50% set-aside for livestock-related projects. The Senate bill would limit the livestock set-aside to non-IRA funding, while also creating a 10% set-aside for practices implemented on small farms.
Means testing: The House bill would remove AGI limitations for conservation program participants earning 75% or more of their income from agriculture.
FARM LOANS
Both bills would raise limits on FSA direct and guaranteed farm operating and farm ownership loans, but the caps for guaranteed loans would be higher under the House measure. The limits on direct operating and ownership loans would be $750,000 and $850,000 under both bills. Caps on guaranteed operating and ownership loans would be $3 million and $3.5 million under the House bill, and $2.6 million and $3 million respectively under the Senate bill.
INTERNATIONAL TRADE
Trade promotion: 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 Senate bill would maintain existing funding levels. At the request of Senate Agriculture Committee leaders, USDA is building out a parallel trade promotion funding initiative using Commodity Credit Corporation spending authority.
Food for Peace: The House bill would require 50% of Public Law 480 funding be used for purchases of of U.S-grown commodities and to pay the cost of shipping. The Senate bill's minimum is 40%.
FOREIGN FARMLAND
Both bills address concerns about foreign acquisition of U.S. farmland. The House bill contains provisions to tighten tracking of foreign ownership of U.S. farmland. It would impose a 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 (GAO) for improving the department's tracking of purchases under the Agricultural Foreign Investment Disclosure Act.
In addition to a ban on commodity program payments on foreign-owned land, the Senate bill would expand AFIDA reporting requirements to include leasing agreements of 5 years or more.
NUTRITION ASSISTANCE
The biggest policy dispute by far is over whether to restrict how USDA conducts future updates of the Thrifty Food Plan, the model of eating expenditures that is used to set SNAP benefits. Stabenow is strongly opposed to such restrictions but her bill would require future updates to include external peer review and be submitted to Congress and the GAO.
SNAP benefits: Both bills repeal a ban on SNAP benefits for former drug felons. The Senate bill also would exempt individuals 24 years and younger who are in college and have aged out of foster care from SNAP college student restrictions. The House bill would direct USDA to issue guidance to states on how to notify college students eligible for SNAP and ensure that income of individuals through age 21 and in secondary school is not used against total household eligibility.
The Senate bill would exclude the value of the military basic housing allowance in calculating SNAP income eligibility and would allow residents of Puerto Rico to receive SNAP benefits.
Food banks: Funding to buy commodities to be distributed to states under the Emergency Food Assistance Program (TEFAP) would increase $900 million over 10 years under the Senate bill.
RURAL BROADBAND
USDA’s ReConnect grant and loan program for rural broadband would get a home in the farm bill under both proposals. The Senate bill would authorize $650 million a year through fiscal 2029 compared to $350 million under the House bill. But the House bill could result in higher-speed service for some projects. The Senate bill would require projects to provide minimum speeds of 100 megabits per second (Mbps) download and upload. Speed requirements in the House bill would vary from 100/50Mbps for agreements of less than eight years, 250/125 Mbps for agreements between eight and 14 years and 500/250Mbps for those of more than 14 years.
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