The House Agriculture Committee formally appealed Thursday for "adequate resources" in the next farm bill to compensate for what the panel says is the “ineffectiveness” of existing commodity programs. 

The committee approved a letter to House Budget Committee Chairman Jodey Arrington, R-Texas, that doesn’t ask for a specific amount of additional money. But the letter notes that farmers have received $93.3 billion in ad hoc trade aid and disaster assistance over six years, or 50% more money than existing farm bill commodity programs are expected to cost over 10 years. 

Those supplemental payments were largely intended to compensate producers for the impact of then-President Donald Trump's trade war with China and to offset the impact of natural disasters and the COVID-19 pandemic.

“Today, the combination of spiking input costs and outdated policy has rendered the commodity title ineffective,” the letter says. 

Market prices for corn, soybeans, what and cotton would have to fall by 23%, 30%, 21%, and 52% respectively 2023 to trigger payments under provisions of the 2018 farm bill, the letter says. “If left unchanged, while production costs remain sticky, many producers would be bankrupt before Title I support provides assistance,” the letter says. 

The letter comes as House GOP leaders are demanding the White House agree to cuts in federal spending in return for supporting an increase in the government’s debt ceiling. The Ag Committee letter claims that increasing farm bill funding would ultimately reduce the need for future ad hoc assistance. 

"The Committee acknowledges the enormity of the task you have before you as the House Committee on the Budget seeks to report a fiscal year 2024 budget resolution. We believe the 2023 Farm Bill can be a vehicle that aids you in this process through strategic investments in critical programs that will alleviate the need for costly and inefficient emergency ad hoc spending and promote economic growth, thus contributing to lowering the debt-to-Gross Domestic Product (GDP) ratio," the letter says. 

The letter also says, "With adequate resources, the Committee believes it can craft an improved safety net that takes the pressure off policy makers to intervene every time a market or weather-related disaster strikes.

Ag Committee Chairman Glenn “GT” Thompson, R-Pa., said funding on commodity programs and crop insurance make up 0.2% of all federal spending. “If done correctly, we can get away from this cycle of ad hoc aid, and instead implement pro- growth policies across all the titles of the farm bill,” Thompson said.

The committee letter also notes that the commodity price estimates that the Congressional Budget Office is using to project the cost of farm bill programs are lower than the projections made by USDA and other sources. The lower price estimates increase the projected cost of increasing commodity program reference prices.

Speaking this week at Commodity Classic, the annual meeting of grain and oilseed producers, Texas A&M University economist Bart Fischer estimated a 10% increase in reference prices would cost about $20 billion over 10 years. A 20% increase would cost more than $50 billion. 

A 10% increase in the reference price for wheat alone would cost $4.3 billion over 10 years, Fischer estimated. A 20% increase in the wheat reference price would push the 10-year cost to $10.8 billion.

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