House Agriculture Chairman Mike Conaway kicked off a battle over the next farm bill by releasing draft legislation that would make some improvements to major commodity programs, while overhauling conservation policy and making sweeping reforms to nutrition assistance.
The nutrition provisions, which would expand work requirements for the Supplemental Nutrition Assistance Program, led to an unusually bitter and partisan impasse that forced Conaway to delay planned committee action on the bill in March.
Conaway, R-Texas, said the bill will be numbered H.R. 2, reflecting the importance of the bill to the GOP leadership. Low bill numbers are reserved for major legislation. The tax bill enacted in December was H.R. 1.
“The farm bill keeps faith with our nation’s farmers and ranchers through the current agriculture recession by providing certainty and helping producers manage the enormous risks that are inherent in agriculture," said Conaway. "The farm bill also remains faithful to the American taxpayer and consumer."
The committee is scheduled to begin debate on the bill next Wednesday morning.
The bill would preserve the structure of the 2014 farm bill’s commodity title largely intact, while allowing farmers to choose whether to switch from the Agriculture Risk Coverage to the Price Loss Coverage program, which is expected to be far more popular in coming years.
The bill also would modify PLC to add an escalator provision that would raise reference prices should commodity prices rise significantly. PLC payments are triggered when market prices fall below the reference levels. Under the bill, the reference price for a commodity would be raised when the five-year moving average of market prices rises more than 15 percent above the reference level.
Soybeans are the commodity most likely to be affected, but the five-year average would have to exceed $10 a bushel, said Patrick Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri. The statutory reference price is $8.40 per bushel. USDA estimates that prices farmers get for their 2017 soybean crop will average $9.30.
Reference prices would be capped at 115 percent of the statutory levels.
In addition, farmers who were affected by severe drought (D4, the highest ranking) for at least 20 consecutive weeks from 2008 to 2012 would be allowed to update their PLC yield histories based on their 2013-2017 yields. Yields in the current program were set based on 2008-2012 data. An estimated 400 counties would qualify for the update.
ARC would be modified to reduce disparities in payments in different regions of the country. Coverage would be based on the Risk Management Agency’s yield data and commodity revenue would be separately calculated for drylands and irrigated acreage. ARC coverage also would be based on the county where a farm is physically located.
The bill “strengthens the farm safety net to help farmers and ranchers weather a five-year recession, depressed prices and a 52-percent drop in net farm income,” according to a summary prepared by committee Republicans.
Dairy producers’ Margin Protection Program, which was expanded in the budget agreement that Congress passed in March, would see additional changes sought by the committee’s ranking Democrat, Collin Peterson, to increase the prospect of payments.
Top coverage levels for the first 5 million pounds of production would increase to $9 per hundredweight, up from the current $8 limit. To offset the cost of increasing the coverage levels, premiums would be restored at the $4.50 and $5 levels. Fees for those levels were abolished by the budget agreement.
Peterson, who is now opposed to the bill because of the nutrition title, introduced the MPP changes in a separate bill this week, even though Conaway has left the provisions in his draft.
Here are highlights from other sections of the bill:
Conservation: The bill would make major, and widely anticipated, changes to conservation programs by folding the Conservation Stewardship Program into the Environmental Quality Incentives Program and increasing the cap on the Conservation Reserve Program from 24 million acres to 29 million acres.
The increase in CRP acreage, also sought by Peterson, would be paid for by capping payments at 80 percent of county rental rates and reducing other assistance to contract holders.
The changes to conservation will have numerous critics - the grain industry is strongly opposed to expanding CRP, for example - but the partisan fight over the bill’s nutrition title will swamp any battles over other sections of the bill.
Under current law, EQIP provides cost-share assistance for new equipment and practices, while CSP provides long-term incentive payments for improved practices. The bill would simplify qualifications for the incentive payments, which would be provided to farmers who address local natural resource concerns. Up to three natural resources concerns could be identified within a region of a state.
Existing CSP contracts would be allowed to continue to their expiration.
The bill also would provide $250 million a year for the Regional Conservation Partnership Program, $500 million a year for the Agricultural Conservation Easement Program and $100 million annually for the Small Watershed Rehabilitation Program.
A new pilot program in the bill’s conservation title would provide $100 million to control feral swine.
Crop insurance: The bill would allow a producer to qualify for up to 10 years for a beginning farmer's premium discount on whole farm revenue insurance.
USDA's Risk Management Agency is told to prioritize the development of better insurance coverage for hurricane damage. Citrus growers in Florida have complained that existing revenue policies aren't worth the cost because of inadequate yield coverage levels.
Animal health: To address concerns of the livestock industry, the bill fully funds a foot and mouth vaccine bank though only for one year. The vaccine bank is part of the bill’s new Animal Disease Response Preparedness and Response Program, a $450 million outlay over the five-year bill. The program is modeled after the Plant Pest and Disease Management and Disaster Prevention Program already in place.
The bill authorizes the $150 million sought by the industry for the FMD vaccine bank, $30 million for the National Animal Health Laboratory Network, and $70 million for the National Animal Disease Preparedness and Response Program for a total $250 investment. In the following years, however, the funding drops to an annual $50 million, with $30 million for the National Animal Disease Preparedness and Response Program and $20 million for any of the three components at USDA’s discretion.
The vaccine bank – which the industry wanted to see funded at $150 million for every year - is also designated as a U.S.-only vaccine bank, a possible point of differentiation between the vaccine bank already in place shared with Canada and Mexico.
Regulatory relief. The bill would eliminate the current requirement that EPA consult with the Fish and Wildlife Service and/or the National Marine Fisheries Service on the impacts of pesticides on threatened and endangered species.
Pesticide manufacturers have complained that interagency consultations take far too long and are based on faulty data. But environmental groups say that the new language would allow companies to ignore pesticides' potential to harm endangered species.
Research: Increases funding for the Organic Agriculture Research and Extension Initiative, which was funded at $20 million a year in the 2014 farm bill. The bill would provide no new funding for the Foundation for Food and Agriculture Research, which was established with $200 million in the 2014 farm bill.
The bill also seeks to streamline the reporting and planning process for formula funding provided to land-grant universities.
Specialty Crops: Maintains funding at $85 million per year for Specialty Crop Block Grants. The bill also provides full funding for the Specialty Crops Research Initiative, including set-asides for citrus research and extension.
Trade: The bill would combine USDA’s trade programs, including the Market Access Program and Foreign Market Development program under a new International Market Development Program funded at $255 million per year. The bill would guarantee $200 million in annual funding for MAP and no less than $34.5 million for FMD, $10 million for the Emerging Markets Program and $9 million for Technical Assistance for Specialty Crops Program.
All but MAP would have no funding after this year. Combining the programs is intended to ensure that the Congressional Budget Office would consider all of the programs to have permanent funding baseline.
Agriculture Secretary Sonny Perdue welcomed the bill's release. "The trend of low commodity prices over recent years and headlines about trade disputes have caused anxiety among agricultural producers these days, so this legislation is critically important to give them some much-needed reassurance," he said.
Leaders of the Senate Agriculture Committee reiterated their pledge to advance a bipartisan bill, which wouldn't have the nutrition provisions Democrats oppose. The bill also is expected to preserve CSP as a standalone program.
In a joint statement, the chairman of the Senate committee, Pat Roberts, R-Kan., and ranking Democrat, Debbie Stabenow of Michigan, said: “We continue to be committed to working on a farm bill for all farmers and families. With low commodity prices, worsening conditions in farm country, and unmet needs in communities across the country, we need to get this farm bill right. We're working together as quickly as possible to produce a bipartisan bill that can pass the Senate and be enacted into law.”
Spencer Chase and Steve Davies contributed to this report.
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