President Trump signed into law Friday a sweeping budget agreement that will provide new assistance to cotton and dairy producers and expand disaster aid to many other farmers and ranchers.
The budget deal, which the Senate and House passed in the early hours Friday following a partial government shutdown, also increases government spending limits for two years and keeps the government operating though March 23, when lawmakers hope to pass another bill to fund federal agencies through the rest of fiscal 2018.
Included in the budget agreement were provisions to make cotton eligible for the Price Loss Coverage program and help dairy producers by reducing the cost of the Margin Protection Program and lifting an underwriting cap on livestock insurance policies.
The House and Senate Agriculture committees have been delaying work on a new farm bill, waiting for the cotton and dairy provisions to be included in the budget deal. A quirk of congressional appropriations rules allowed lawmakers to pay for the dairy provisions by essentially creating $1.2 billion in new farm bill funding, according to a Congressional Budget Office estimate. The Agriculture committees would have had to offset the cost of the dairy assistance with cuts elsewhere in the farm bill.
The cost of the cotton PLC payments are offset by cotton-related changes to the 2014 farm bill.
The budget agreement also includes $2.4 billion in aid to farmers hurt by last year’s hurricanes and additional improvements to existing USDA disaster programs for livestock producers, fruit growers and others.
The changes to disaster programs are retroactive to the beginning of 2017. Among the changes, the bill lifts the $125,000-per-producer payment cap under the Livestock Indemnity Program and allows payments to producers who had to sell their livestock at a discount due to natural disaster.
The bill also removes the $20 million annual cap on the Emergency Assistance for Livestock, Honey Bees and Farm-Raised Fish Program, and doubles payment acreage for the Tree Assistance Program from 500 acres to 1,000 acres.
In addition, the bill restores, for 2017 only, the $1-a-gallon tax credit that subsidizes biodiesel. The credit lapsed after 2016.
The final House vote on the budget agreement didn’t come until about 5:30 a.m. Friday, after the government had been partially shut down for more than five hours when Sen. Rand Paul, R-Ky., forced the Senate to delay acting on the measure until after midnight. The Senate eventually approved the bill, 71-28, and the House followed suit, 240-186. President Trump signed the bill around 8:40 a.m.
The margin in the House was in doubt because of opposition to the bill from conservative Republicans who didn’t like the agreement to increase non-defense spending limits. Many Democrats complained that the bill didn’t address the issue of the Dreamers, immigrants who were brought to the country illegally as children. In the end, 73 House Democrats joined 167 Republicans in approving the bill.
Farm groups welcomed the new assistance in the bill.
“This measure will provide cotton producers and lenders some certainty as they prepare for the 2018 growing season,” said Ronnie Lee, chairman of the National Cotton Council, which is holding its annual meeting this weekend in Fort Worth, Texas. “The new policy will help ease the financial burden as producers struggle to cover total costs.”
The legislation makes seed cotton, the unginned combination of fiber and seed, eligible for PLC at a reference price of 36.7 cents per pound. Payments would be triggered when the average seed cotton price falls below the reference price. This year’s crop would be the first one eligible for PLC, but the first payments to growers would not go out until fiscal 2020, which begins in October 2019.
The dairy provisions will “help pave the way for final adjustments to the dairy safety net for the next five years as Congress crafts a new Farm Bill,” said Jim Mulhern, president and CEO of the National Milk Producers Federation.
The MPP reforms are intended to make the program more responsive to dips in prices and reduce the cost of higher coverage levels.
Potential payments will be calculated on a monthly rather than a bimonthly basis, which is the case under previous law. Premiums for small and medium-size farms will be eliminated on $4.50 and $5 coverage levels and sharply reduced at all higher levels.
The National Cattlemen’s Beef Association welcomed the changes to the Livestock Indemnity Program, whose beneficiaries will include Kansas ranchers caught in the 2017 wildfires.
The provisions "will ensure that ranchers and beef producers harmed by natural disasters in 2017 will receive the federal support they deserve,” said Colin Woodall, NCBA’s senior vice president of government affairs.
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