The Senate Agriculture Committee’s draft farm bill would make additional improvements for dairy producers and the Agriculture Risk Coverage program while expanding the Conservation Reserve Program and renewing funding for a research foundation and other popular programs that are slated to run out of money.

The Agriculture Improvement Act of 2018, the text of which was released Friday afternoon, also would legalize the production of industrial hemp, a top priority for Senate Majority Leader Mitch McConnell, R-Ky.

The draft closely tracks the 2014 farm bill and would create few new programs. Among the exceptions: An animal disease vaccine bank, although it would have no mandatory funding, and a pilot program to provide produce to low-income people through health-care providers. Click here for a section by section summary of the draft bill. 

As expected, the biggest difference with the House farm bill is the absence of major reforms to the Supplemental Nutrition Assistance Program. The House bill would expand work requirements for SNAP beneficiaries and eliminate broad-based categorical eligibility, which allows people in many states to qualify for SNAP at income levels well above the federal standard. The Senate bill contains none of those changes. However, the Senate version “improves program integrity” by eliminating performance bonuses and making other changes, according to committee staff.

Programs that have no money beyond this year are being funded partly by reducing the interest rate that rural electric cooperatives earn on deposits with USDA. The interest rate is currently set at 5 percent. 

The Senate Agriculture Committee is scheduled to act on the bill on Wednesday.

Here is a look at the Senate bill: 

Agriculture Risk Coverage: The bill would modify ARC guarantee calculations to increase the substitute “transitional” T-yield from 70 percent to 75 percent of the county T-yield when yields are lower than 75 percent. Like the House bill, yields compiled by the Risk Management Agency would become the default data for calculating ARC guarantees rather than information from the National Agricultural Statistics Service. Also, ARC payments could be calculated according to the county where covered land is located, not where the farm is based. 

Reference prices in the Price Loss Coverage program would not be changed. The House bill includes a trigger to raise PLC reference prices if they exceed the average price of a commodity by 15 percent. 

Payment limits. The means test for commodity payments would be tightened. The adjusted gross income limit for commodity payments would be reduced to $700,000 a year, from the current limit of $900,000.

The House bill would ease eligibility rules by allowing members of LLCs and S corporations to individually qualify for up to $125,000 in subsidies and adding cousins, nieces and nephews to the list of a farmer’s family members eligible for payments.

Dairy. Coverage levels in the Margin Protection Program would be increased to $9 per hundredweight, up from the current $8. That mirrors a change in the House bill. There also would be new premium discounts of 50 percent for farms with fewer than about 100 cows and 25 percent for producers with about 450 cows or less. The draft would rename MPP the Dairy Risk Coverage program.

Crop insurance. The Senate bill would make hemp eligible for crop insurance and waive the viability and marketability requirements for pilot programs covering hemp.

The draft attempts to remove an impediment to cover crops by clarifying the conditions under which cover crops and other voluntary conservation practices are considered good farming practices.

The bill would allow a producer to create a single enterprise unit by combining enterprise units or by combining enterprise units with basic units and optional units in multiple counties.

The draft seeks to increase sales of whole farm revenue insurance by providing agents an additional financial incentive. 

Conservation. The acreage limit on the Conservation Reserve Program would be increased to 25 million acres, up from the current limit of 24 million acres. The increase would be offset by capping CRP payments at 88.5 percent of local rental rates. The House bill would increase CRP to 29 million acres and cap CRP payments at 80 percent of local rents.  

New enrollment in the Conservation Stewardship Program would be capped at 8.8 million acres a year, down from the current limit of 10 million acres. But the draft bill includes changes that include authorizing one-time payments for conservation planning and targeting more support to practices that improve soil health. The House bill would eliminate CSP. 

Funding for the Environmental Quality Incentives Program would be gradually raised from $1.473 billion in 2019 to $1.595 billion by 2023. Half of EQIP funding would be reserved for livestock producers. The House bill would eliminate the livestock set-aside.

The Regional Conservation Partnership Program, which combines spending from USDA programs and non-federal sources, would be funded at $200 million a year, twice what it now receives. Under the House bill, RCPP would no longer be funded out of CSP and EQIP and instead would get its own funding source at $25 million a year. 

The bill would authorize, but not fund, the Soil Health and Income Protection Program proposed by Sen. John Thune, R-S.D., for landowners who agree to idle land for three to five years. 

Nutrition. The Senate draft provides additional funding for pilot programs that study approaches to helping SNAP recipients find jobs or higher-paying employment, building on 10 projects funded by the 2014 farm bill. The bill would provide $185 million for the new projects targeting older adults and others with special difficulties, including substance abuse. 

The Food Insecurity Nutrition Incentive Program, which funds incentives for SNAP recipients to buy fruits and vegetables, would be funded at $50 million a year. The program is set to expire Sept. 30. The House bill would increase funding to $65 million a year. 

The Senate bill's "produce prescription" pilot program for health-care providers would be funded at $4 million a year.  

Energy. Programs that were designed to promote energy efficiency and development of fuel and chemicals from biomass are left without mandatory funding for the most part, a major blow to industries that rely on the programs. The Rural Energy for America Program would be provided with $50 million a year, the same amount it was allocated in the 2014 farm bill. But funding for other programs, including biomass crop assistance and advanced biofuel support, would be left up to congressional appropriators. 

The House bill would eliminate the farm bill energy title as well as the permanent funding baseline for REAP. 

Organic agriculture. The Senate bill would increase funding for the Organic Research and Extension Initiative to $50 million a year by 2022, up from the $20 million the program now receives. The bill also would provide $11.5 million a year for organic certification cost-share and $5 million in one-time funding for the Organic Data Initiative, which collects market data. 

The draft also would impose new regulations on imported organic products to guard against fraud. 

Local and urban agriculture. The Senate bill would combine USDA's value-added producer grants and the Farmers Market and Local Food Promotion Program into a new Local Agriculture Market Program funded at $60 million a year. 

The bill would establish an office of urban agriculture and innovative production at USDA and provide $4 million a year in research and education on urban and indoor agriculture.

Research: The Foundation for Food and Agriculture Research, which was created by the 2014 farm bill, would receive another $200 million, the same amount as Congress originally provided in seed money. The House bill would provide no new funding for FFAR. 

Trade promotion. As in the House bill, the Senate draft would combine USDA’s export promotion programs for funding purposes, including the Market Access Program and the Foreign Market Development Program, one of the 39 programs that is slated to expire this year. 

USDA reorganization. The bill would would provide legal authority for a key part of Agriculture Secretary Sonny Perdue's reorganization plan, which combined the Natural Resources Conservation Service with the Farm Service Agency and the Risk Management Agency, creating a new "farm production and conservation" mission area under Undersecretary Bill Northey

Vaccine bank. The Senate draft authorizes creation of a vaccine bank but doesn't earmark funding for it. The House bill would provide $150 million in one-time funding. 

The Senate draft, which reflects a bipartisan compromise between Chairman Pat Roberts, R-Kan., and ranking Democrat Debbie Stabenow of Michigan, steered clear of some regulatory-relief provisions that are in the House bill. 

Their bill omits language sought by the crop protection industry that would allow the Environmental Protection Agency to approve pesticides for use without going through the formal consultation process with the Fish and Wildlife Service and/or the National Marine Fisheries Service. 

Environmental groups said the provision would imperil passage of the farm bill.

The bill also leaves out language reauthorizing the Pesticide Registration Improvement Act. The House bill includes the text of a bill approved by the House last year that would reauthorize the program -- which collects fees from pesticide registrants to help fund work by EPA’s Office of Pesticide Programs -- for another seven years. A Senate bill that would have reauthorized it for three years never got a vote on the floor because of a hold placed on it by Sen. Tom Udall, D-N.M.

Read the draft bill here and a section-by-section summary here

Steve Davies contributed to this report. 

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