Senate Agriculture Committee Chairwoman Debbie Stabenow expects to have $4 billion to $5 billion in new funding available to address issues with commodity programs and expand crop insurance options, she said in an exclusive interview with Agri-Pulse.
Her priorities include expanding a highly subsidized crop insurance product that’s now limited to cotton growers, and she said she’s open to addressing concerns that Price Loss Coverage reference prices aren’t high enough to account for recent increases in input costs.
The Michigan Democrat didn’t identify the source of the extra funding but said she had worked with Majority Leader Charles Schumer, D-N.Y., to find money from outside the farm bill. Earlier in the afternoon, she had alluded to the extra funding during a comprehensive farm bill speech on the Senate floor.
“The kind of money that I've been talking to Sen. Schumer about is enough for us to do something really good on crop insurance, to fix the dairy program, (and) to do something on reference prices,” she said.
Also in the interview, she said Congress would need to pass a yearlong extension of the 2018 farm bill in November or December. Stabenow, who said the upcoming farm bill would be her sixth in Congress, also rejected the idea of imposing new restrictions on future USDA updates of the Thrifty Food Plan, the economic model used to determine Supplemental Nutrition Assistance Program benefits. Republicans would like to use such restrictions to generate savings that could be moved elsewhere in the farm bill.
Stabenow said the yearlong extension would include funding for several programs that didn’t have funding beyond Sept. 30, including the Foundation for Food and Agriculture Research.
House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., has said a one-year extension is too long.
Stabenow acknowledged that passing shorter extensions would keep more pressure on Congress to finish a new farm bill. But, she said, “USDA tells us that as a practical matter, it has to be a year because of the way that commodity programs work.”
The Chairwoman denied rumors that she’s considering a farm bill that would only have Democratic support. She said that would be a pointless exercise, looking to the 60 votes necessary to move legislation through the Senate. '
Still, she has some policy priorities she’s pursuing, including finding a way to expand the reach of an insurance product known as the Stacked Income Protection Plan, or STAX, which is currently limited to cotton growers.
Farmers who buy STAX can insure up to 90% of their county’s expected revenue, with the government picking up 80% of the premium. SCO covers up to 86% of revenue with a 65% federal subsidy. The government generally subsidizes 62% of the premiums on conventional policies.
“There’s interest in whether we could design something like STAX for other commodities,” Stabenow said.
Farmers who buy STAX policies can’t have the same base acres enrolled in the farm bill’s Price Loss Coverage program, which triggers payments when market prices fall below the reference price for a commodity, or the Agriculture Risk Coverage program. STAX is considered especially valuable when market prices and production costs are relatively high and growers aren’t likely to see payments from ARC or PLC, anyway.
For specialty crops, Stabenow is working with the industry on an initiative aimed at developing the data needed for expanding the types of crops that are eligible for crop insurance.
As for addressing the major row crop commodity programs, Stabenow said an across-the-board increase in reference prices is out of the question because of the price tag. She didn’t rule out modifying an escalator that allows reference prices to rise when market prices have risen sharply in recent years.
But she noted that existing reference prices are higher for some crops than others in relation to market prices, and she also expressed concern that raising reference price rates will wind up raising farmland rent.
"I do think there's some folks that want to get just get back to direct payments, where it kicks in no matter what," she said.
“There’s this broad rallying cry, which I appreciate, (that reference prices need to be increased), but I want to get to specifics,” she said. “You write a farm bill by getting to specifics. What are you trying to solve? What are the resources to do that?”
Stabenow also suggested that ARC and PLC were more critical to some commodity groups than others.
While about 130 commodities are eligible for crop insurance, only “20 crops get ARC and PLC, and even fewer of those actually would live and die for that,” she said.
Raising PLC reference prices is a top priority for Thompson and Senate Ag’s ranking Republican, John Boozman of Arkansas.
Thompson, who is searching for ways to pay for that as well as another number of farm bill enhancements, has been trying to sell his committee’s Democrats on the idea of restricting the way USDA conducts future updates of the Thrifty Food Plan. Updates required by the 2018 farm bill and implemented in 2021 by the Biden administration resulted in a significant increase in SNAP costs.
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Stabenow shook her head when asked if she would consider such restrictions.
“They don’t want to do a real update. They want it to be no cost. … It took 50 years to get a real update in SNAP,” she said, while lamenting there was no adjustment for higher food prices.
She said calculating CBO scores on this are difficult. "In the past, assumptions were based on women cooking about two hours a day, she said, rather than reflecting current trends.
She made clear that ideas like that amounted to poison pills.
“This is where we write farm bills based on reality,” she said. “I have members of my committee and our caucus that would like to cut crop insurance. I have members that would like to take some of the Trump tax cuts that were done through reconciliation and roll them back a bit so we can fund these things in the farm bill we want. That's not going to get Republican votes.”
During the interview, Stabenow disclosed that her staff is looking at ways to permanently increase funding for trade promotion programs without adding more money for them into the farm bill. The idea involves augmenting the farm bill programs through the use of $1.3 billion that Agriculture Secretary Tom Vilsack is providing for trade development through USDA’s Commodity Credit Corporation account.
Work on the concept is being led by Mike Schmidt, who was detailed to Stabenow’s staff this fall. He has been at USDA as an adviser to Vilsack and previously to Robert Bonnie, USDA’s undersecretary for farm production and conservation.
Separate from the farm bill, Stabenow indicated she would like to find new sources of funding for agricultural research.
“I would love a moonshot in ag research, and we don't have the funds” within the farm bill, she said.
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