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Farm Bill Update
Thursday, August 1, 2024
filed under: Marketing/Risk Management
By Tom Hance*
Most observers would put the chances of a new farm bill getting enacted this year at zero, or close to it. I’ll be more positive and just say the prospects are diminishing.
The current farm bill, enacted in 2018, initially expired September 30th of 2023. Prior to the end of 2023, Congress passed a one-year extension through September of 2024. That extension covers the crop year 2024; but if a new farm bill is not enacted before the end of calendar year 2024, Congress will need to pass another extension.
What progress has occurred?
Spring 2024 did see some developments and action that provided hope for getting a bill enacted this year. House Ag Committee Chairman GT Thompson (R-PA) released his farm bill proposal and held a committee mark-up on May 23rd that concluded with the bill passing out of committee with some bipartisan support. However, the bill likely does not have sufficient support to pass the full House of Representatives and has not been scheduled for consideration on the full House floor.
Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) and Ranking Member John Boozman (R-AR) each released summaries of their farm bill proposals in May and early June, though no Senate committee action has occurred or been scheduled. Chairwoman Stabenow has been critical of the bill that passed out of committee in the House. Ranking Member Boozman’s proposal is similar in many respects to the House bill, and there has been no indication of negotiations or discussions between Stabenow and Boozman toward a compromise.
If or when there is a new farm bill, what might it look like?
The farm bill that was passed by the House Ag Committee provides significant improvements for Title I Farm Programs including increases in Reference Prices under the Price Loss Coverage (PLC) program. The Reference Prices are increased for each covered commodity ranging from 10% to 20%. The “Other Oilseeds” category, which includes sunflower, is increased 17.9% from $20.15 to $23.75 per cwt.
The House bill also provides for an expansion of base acres, available to all farmers whose average plantings exceeded their base acreage between 2019-2023. The bill increases the Marketing Assistance Loan Rates for commodities and expands the crop insurance Supplemental Coverage Option (SCO) to cover 90% of the expected county yield, with the premium subsidy increased to 80%.
On the Senate side, Chairwoman Stabenow’s proposal is primarily a continuation of the current farm bill with modest changes for the ARC and PLC Title I Farm Programs, increased Marketing Assistance Loan rates to reflect cost of production, and expansion of the crop insurance SCO. Notably, the Stabenow proposal adds sunflower breeding as a high priority initiative under the USDA Agricultural Research Service.
Ranking Member Boozman’s proposal takes a similar approach to Chairman Thompson’s bill in the House with increases in Reference Prices for all Title I commodities by an average of 15%, though the specific levels for each commodity have not been released. The Boozman proposal also increases ARC coverage level, provides inflationary increase for payment limits, increases Marketing Assistance Loan rates, and provides for base acre increases for “those with minimal or no base.”
The Boozman proposal includes the most aggressive expansion of crop insurance, as it increases affordability of individual revenue and yield protection policies at higher coverage levels by increasing premium subsidies to 77% at 80% coverage level and to 68% at the 85% coverage level, as well as increasing SCO to 90% coverage with 80% premium subsidy. The crop insurance provisions in the Boozman farm bill proposal mirror the core provisions of a crop insurance bill introduced by Sen. Hoeven (R-ND) that is supported by the National Sunflower Association.
What has to happen for the farm bill to get enacted in 2024?
To get a new farm bill enacted rather than another extension would require some negotiations to occur between the leaders of the House and Senate agriculture committees before the November elections. If there was some progress in negotiations before November, a new farm bill could conceivably be enacted during the Lame Duck session of Congress that will occur after the elections and before the end of the calendar year. There is often a “clear the decks” mentality during the Lame Duck sessions in which they try to complete any lingering issues before the new Congress and new Administration take office.
Relative to previous farm bills and other federal legislative policy issues, there does not seem to be a great divide between Democrats and Republicans on the policies and issues of the farm bill — especially when it comes to Title I Farm Programs. The differences are primarily around how to pay for any expansions and how to divide up the pie and allocate the available funding among the programs within the farm bill.
While I’d like to say that there was evidence of progress in negotiations over how to divide up the farm bill pie, which could put the bill in position to be completed during the Lame Duck session, that doesn’t seem to be the case. In fact, there don’t seem to be any negotiations occurring at all. Congress will only be in session for a couple of weeks in September before adjourning to campaign for the final month leading up to the election. A lot of progress would need to occur in that time. There’s still a chance…but the prospects are diminishing.
* Tom Hance of Gordley Associates is Washington representative for the National Sunflower Association.