Back in Washington, DC following the annual August recess, Members of Congress now face a lengthy legislative to-do list in September that includes work on the 2018 Farm Bill that is set to expire at the end of the month. With time running short, we start to wonder: Where does that leave the Farm Bill reauthorization process, and will Congress complete the next Farm Bill on time?
Farm Bill review
The “Farm Bill” is a comprehensive piece of agriculture and nutrition legislation addressing commodity programs, conservation, crop insurance, food security, and more. It is typically set to expire every five years to be modernized to meet the changing demands of food and agriculture. If the legislation is not reauthorized or extended, many programs revert to 1949 permanent law, including the farm commodity programs. Some programs, such as Crop Insurance, the Conservation Reserve Program (CRP), and the Supplemental Nutrition Assistance Program (SNAP), are part of permanent law and do not expire.
Agriculture economists use phrases like “parity pricing” and “dairy cliff" in discussions of permanent law, pointing out that the USDA fresh milk support price could be more than $50/cwt, 28 times the expected cost of the current dairy program to the federal government. Successful Farming recently reported some examples of the cost of reverting to permanent law, based on a non-partisan Congressional Research Service report. Successful Farming recently reported some examples of the cost of reverting to permanent law based on a non-partisan Congressional Research Service report.
However, if the new farm bill is not completed by September 30, there is still time for Congress to wrap up its work before the 1949 programs kick in at the beginning of the new year. If not completed by the end of the year or early January, Congress will need to extend the existing farm bill to prevent programs from reverting to permanent law. With an extension, most programs will continue, including farm commodity programs, conservation programs like CRP, nutrition programs, and crop insurance. A few programs, called “orphan” programs, lose funding and would end until they can be reauthorized in the next farm bill. Extensions are not unusual, the last time a farm bill was completed and enacted on time was in 1990.
Challenges of completion
It is doubtful the Farm Bill will be completed by the end of September. While agriculture committee staff work on language, drafts have yet to be made available to the public. Challenges of completion include:
- A possible government shutdown.
- A very divided Republican caucus in the House.
- Delays in getting cost estimates from the Congressional Budget Office (CBO).
First, Congress must either pass twelve appropriations bills or a continuing resolution (CR) before the end of the fiscal year on September 30 to keep the federal government funded and running. The threat of a government shutdown will get considerable debate, making discussion on the Farm Bill almost impossible.
Second, the Freedom Caucus in the House will likely call for cuts in nutrition spending and other programs. Their efforts could hold up moving legislation forward until they get some concessions from House leadership. Also, something different this year: The House Rules Committee may let many more amendments come to the House floor for debate and votes than was the case for recent Farm Bills. Many of these amendments, if passed, are expected to harm crop insurance, commodity programs, and the sugar program. It will require a lot of effort to defeat them.
Third, the ag committee staff and others have experienced considerable delays in getting cost estimates for bills and amendments due to a change in staff in the Congressional Budget Office. Congress needs a cost estimate of each new proposal in the Farm Bill before it can be voted on in the Ag Committees. Also, there likely won’t be any new money to improve programs in the new farm bill, so the ag committees are working hard to find unused funds that could be retargeted to improvements.
These challenges will make it almost impossible to complete the farm bill by September 30. However, not making that deadline is not the end of the world. If Congress isn’t close to getting a bill done by January 1, there will have to be an extension. By mid-January, primary elections are upon us, and electoral politics are more prevalent, another big distraction from completing this bill. It’s possible Congress could extend the bill to December 30, 2024, addressing it during the lame-duck session after the election or even September 30, 2025.
Farm Credit is advocating for you
There’s some discussion in ag circles that if we can’t get significant improvements for production agriculture in the commodity programs or crop insurance, it might be better having a longer-term extension. As a result, we wouldn’t have to fight off the slew of expected harmful amendments just to pass a bill that doesn’t make any improvements.
The Farm Credit System, working through the Farm Credit Council, has several priorities for the 2023 Farm Bill. These were outlined in "An Update from the Political Front" in the June 2023 AgCountry “Grow” magazine.
AgCountry and the other associations in the system are working in Washington to move these priorities forward. The two most important to AgCountry are changes to the FSA loan programs and making higher levels of crop insurance more affordable.
Regarding the FSA loan programs, Farm Credit is encouraging Congress to increase the loan limits on the FSA direct loan programs, the FSA down payment loan program, and the FSA guaranteed loan programs. Thanks to Senator John Hoeven (ND) and Senator Amy Klobuchar (MN), the limits were increased in the 2018 Farm Bill and included an automatic inflation adjustment. However, the limit has not kept up with rising land and input costs. Farm Credit would also like the farm experience requirement reduced from three years to one year to make the loans more available to beginning farmers, and modernize and streamline many processes.
The Farm Credit Council notes that we need to protect crop insurance. AgCountry goes a step further and proposes making the higher coverage levels more affordable by increasing the premium support for the 80% and 85% coverage levels and increasing the premium support for the Enhanced Coverage Option (ECO). Farmers in Iowa and Illinois purchase the highest coverage levels and add the ECO supplement because their counties’ premium is very reasonable. However, most farmers in Minnesota, North Dakota, and Wisconsin are insuring at the 70% and 75% coverage levels because it is cost-prohibitive to go to the highest levels. This is also true for most crops in most states outside of the I-states. Getting more farmers and acres on higher coverage levels will reduce the need for ad hoc disaster programs. The Midwest Council on Agriculture endorsed the proposal and it is gaining support in Congress. The main challenge will be finding additional money to add to the increased premium support in the Farm Bill.
There’s an uphill battle to complete the 2023 Farm Bill with improvements that will benefit production ag, and AgCountry and the Farm Credit system continue to push for significant change. The next Farm Bill likely won’t be done by September 30, but there are other windows of opportunity, and it could be done by the end of the year, in the first quarter of 2024, after the November 2024 election, or later.
