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Farm Bill 2023 - The Policy & the Politics

Thursday, August 24, 2023
filed under: News

*By Tom Hance
        There is political gridlock in Washington, D.C.  Try not to be surprised. Control of Congress is divided, with Republicans holding the majority in the U.S. House of Representatives and Democrats the majority in the U.S. Senate.  As a result, any farm bill that is enacted by Congress in 2023 (or more likely 2024) will have to be bipartisan.  That is a reality— though one that does not seem to register with all members of Congress.
        As of this writing, Congress is currently in the midst of its August District Work Period — or “August recess” as it is commonly known.  Congress departed without any formal movement being initiated on a new farm bill.  That’s not a good sign for those hoping a new farm bill will be enacted when the current one expires on September 30th.  Congress does not return to Washington until September 12th, and even when members return, the farm bill will remain on the back burner while legislators deal with the end of the federal fiscal year and the need to enact new appropriations bills or a Continuing Resolution (CR) to keep the government operating.
        There are no immediate dire impacts when the current farm bill expires, and Congress will likely hold out hope of enacting a new bill by the end of the calendar year before considering a temporary extension of the current law.  If a new farm bill is not enacted a few months after the current law expires, an extension will be needed to avoid significant impacts to commodity markets, prices and many programs administered by USDA. 
        While a new farm bill has no chance of getting enacted by the end of September, ag committee leaders will continue to push to get the bill done this year. 
        House Agriculture Committee Chairman Glenn “GT” Thompson (R-PA) has indicated he will be in Washington for much of August to work with staff on drafting a farm bill proposal.  He has stated his goal of introducing the bill in September, having a committee mark-up, and moving to consideration on the House floor in October. While those are his goals, the reality is that the bill is unlikely to move on that timeline.  Chairman Thompson recently acknowledged that he would not want to introduce his proposal until he has an indication from House Leadership that it would be scheduled for floor consideration within the following few weeks.  That would be a difficult commitment for Speaker McCarthy to make, given the views and mood of a segment of his Republican caucus right now.  Those members want to include provisions, or have votes on amendments, that would be politically problematic for other Republican members and would likely be opposed by Democrats.
        Which brings us back to the reality that the farm bill will have to be bipartisan to be enacted.  And, if you haven’t noticed, bipartisan agreements are a rare and endangered species in Washington.
        Now that we’ve covered the political and logistical hurdles, let’s talk about the substance of the bill and some of the key issues being considered. 
        The most politically contentious are the policies relating to the Supplemental Nutrition Assistance Program (SNAP).  Republicans have been seeking to impose work requirements on a broader segment of SNAP recipients.  The agreement reached earlier this year on the measure to raise the debt-limit included provisions to expand the age range of those subject to work requirements. It was hoped that those provisions would remove this contentious SNAP issue from the farm bill debate.  However, a segment of House Republicans were not happy with the debt-limit package and want to see further SNAP reforms in the farm bill. 
        On the farm program policies, much attention has been on the Reference Prices that determine if/when support payments are triggered for covered commodities, including sunflower.  Sunflower is included in the “Other Oilseeds” category with a Reference Price of $20.15/cwt.
        While prices have been high in recent years, and above the Reference Price for most crops, many have pointed to increasing input costs and a concern that production costs will not decline as fast as crop prices, resulting in losses for farmers.  Raising Reference Prices would project to trigger more support payments and require added funding beyond the Farm Bill baseline.
        The baseline is essentially the amount that is projected to be spent under current law.  The Congressional Budget Office (CBO) makes the projections that determine the baseline and the cost of any changes to federal law.  CBO is projecting declines in crop prices that will result in more support program payments — and increasing the Reference Prices increases the cost of the farm bill. For sunflower, from 2025 to 2033 CBO projects prices to range from $18.90 to $20.27 per cwt.
        House and Senate ag committee leaders would need to find funding offsets to cover the additional cost of raising Reference Prices, which is more costly due to the low prices projected by CBO.  Garnering support for a farm bill that increases spending, or for the funding offsets used to cover the additional spending, will be difficult, to say the least. 
        One issue that seems to have universal agreement, at least among row-crop groups, is that crop insurance is the most important component of the farm safety net and should not be diminished in any way.  If anything, expansion of crop insurance coverage is viewed as an area where policymakers would get the “most bang for the buck” if there were more farm bill spending.
        The content of the farm bill will be about determining the size of the pie and how to divide it.  When it comes to farm programs, the differences are less about partisan ideologies and more about regional differences and competing commodities. 
        It probably would not be too difficult for a farm bill to be crafted that would garner sufficient bipartisan support to pass Congress.  Unfortunately, political dynamics make it difficult for such bipartisan measures to be brought to the House floor for a vote. 
        Hopefully, it won’t be too long before the timing and the political climate will align to enable a new farm bill to be enacted that improves the farm safety net.  To get there, committee leaders will seek to balance the right policies with the fiscal realities and, of course, the politics.  I have a feeling we’ll still be working on this in 2024. 
* Tom Hance of Gordley Associates is Washington representative for the National Sunflower Association.
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