In a development with major implications for the next farm bill, House Republicans inserted provisions in a $81 billion disaster aid package to make cotton growers eligible for the Price Loss Program and expand an insurance program for dairy producers.
The cotton provisions in the 184-page disaster bill drafted by the House Appropriations Committee would create a PLC reference price of 36.7 cents a pound for “seed cotton,” defined as “unginned upland cotton that includes both lint and seed.”
The proposal quickly met resistance in the Senate, where the top Democrats on the Appropriations and Agriculture committees have insisted on combining any new farm bill benefits for cotton with a similar amount of assistance for dairy producers.
The top Democrat on the Senate Agriculture Committee, Debbie Stabenow of Michigan, said Tuesday that she was "encouraged that the House has recognized the need to support both dairy and cotton, this bill misses an important opportunity to repair the broken dairy safety net.
"Expanding insurance options for dairy farmers is a good first step – but there’s more we can do to help our producers recover from tough economic times and lay the groundwork for further progress in the 2018 Farm Bill. As the Senate completes its work on the disaster package."
The goal is to add the provisions to a continuing resolution that Congress needs to pass this week to keep the government funded into January.
The House disaster bill includes a provision to lift the cap on Livestock Gross Margin insurance but would not reform dairy's Margin Protection Program.
Sales of LGM coverage to dairy producers are periodically halted because of the legal underwriting limit. By law, USDA can spend just $20 million a year for subsidies and administrative and operating costs for all livestock insurance products. Dairy producers are not allowed to participate in both LGM and the Margin Protection Program at the same time.
Because of congressional budget rules, enacting cotton and dairy provisions in an appropriations bill would reduce budget pressures on the House and Senate Agriculture committees when they write the new farm bill. "It does" make it easier to write a farm bill, "and that's not lost on me or anyone else," House Agriculture Chairman Mike Conaway, R-Texas, told Agri-Pulse Tuesday.
Stabenow and the ranking Democrat on the Senate Appropriations Committee, Patrick Leahy of Vermont, blocked an effort to use the fiscal 2017 omnibus spending bill to make cotton eligible for PLC unless the legislation also overhauled MPP.
According to a source, senators also may insist on including a provision that would clarify that milk is eligible for traditional crop revenue insurance.
The seed cotton provisions wouldn't add any costs to the overall disaster bill because the payments would be offset by changes in the bill, said Conaway. The bill would require growers to reallocate their "generic" base acres, former cotton base acres on which farmers have been receiving payments for other crops. Cotton growers who sign up for PLC would no longer be allowed to purchase the Stacked Income Protection Plan (STAX) revenue insurance policy that was authorized by the 2014 farm bill.
The bill also would expand a five-state pilot program to reduce duplicate enrollments in the Supplemental Nutrition Assistance Program.
Conaway acknowledged that Senate Democrats could insist on including changes to MPP. "We’ll see what the Senate does. We’ll get it out of the House," he said.
House Agriculture's ranking Democrat, Collin Peterson of Minnesota, said he supported the House provision.
The disaster package also includes $2.6 billion in emergency aid to Florida citrus growers and other producers who suffered crop losses.
Rep. Tom Rooney, R-Fla., said the aid is critical to saving his state’s citrus indsutery. “It is a lot of money but these were three generational storms,” he said referring to hurricanes Harvey, Irma and Maria. “We have an obligation to solve problems for the people we represent.”
The bill includes provisions requiring producers who receive the assistance to buy coverage for the next two years. The bill would reduce payments to producers who didn’t obtain insurance for the 2017 crop year, or 2018 in the case of citrus.
In addition to the aid to farmers, USDA would get an additional $541 million for watershed and flood prevention efforts, $400 million for emergency conservation projects and $165 million for repairs to rural water and waste disposal systems.
The aid package could be added to a continuing resolution that Congress needs to pass by Friday to keep the government from shutting down when a stopgap funding bill expires.
“This legislation is the next step in helping our fellow Americans recover from multiple, back-to-back, devastating disasters, including some of the largest major hurricanes, wildfires, and agriculture losses this country has ever seen,” House Appropriations Committee Chairman Rodney Frelinghuysen, R-N.J.
The proposed farm assistance exceeded earlier estimates of the proposed damage.
USDA’s chief economist, Rob Johansson, told the House Agriculture Appropriations Subcommittee last month that the hurricanes caused at least $2.2 billion in crop losses. About a quarter of those losses were insured.
While many Florida citrus growers purchased crop insurance, they largely opted for catastrophic policies that cost just $300, he said. Those policies cover 55 percent of the losses to growers when they lose at least 50 percent of their crop. Growers don't consider buyup coverage worth the cost in part because of the declining yields due to citrus greening disease, Johansson said.
(Updates 2 p.m. Tuesday with Stabenow comment.)