WASHINGTON, July 20, 2017 - Senate appropriators have agreed to provide new farm bill funding to cotton and dairy producers, potentially addressing a major challenge facing lawmakers as they consider writing a new farm bill.
The Senate Appropriations Committee on Thursday approved a fiscal 2018 funding bill for the Agriculture Department and Food and Drug Administration that would make cottonseed eligible for the Price Loss Coverage program and overhaul the dairy industry’s Margin Protection Program to make it significantly more attractive to producers.
“Cotton producers have faced economic hardship because of depressed cotton prices and other factors," said Committee Chairman Thad Cochran, R-Miss. "The provisions in this bill are intended to help our producers even the odds, while keeping cotton gins and associated jobs viable.”
The two fixes could make it easier for the House and Senate Agriculture committees to write a new farm bill because they wouldn’t have to find the money within the legislation to fund the changes to PLC or MPP.
The two provisions each would cost close to $500 million over 10 years, according to sources. The appropriators didn’t have to cut spending elsewhere to offset those added costs because there would be no projected spending in fiscal 2018. To enact the same provisions, budget rules would require the Agriculture committees to account for the costs in future years.
“Cotton producers have faced economic hardship because of depressed cotton prices and other factors. The provisions in this bill are intended to help our producers even the odds, while keeping cotton gins and associated jobs viable,” said Senate Appropriations Chairman Thad Cochran, R-Miss.
The provisions are still a long way from becoming law, but cotton and dairy groups applauded their inclusion in the spending bill. Negotiations to include similar provisions in the fiscal 2017 spending agreement this spring failed in the final hours.
“The cottonseed policy, if enacted, would apply beginning with the 2018 cotton crop, the last year of the current farm bill, and would help address the significant economic challenges currently facing America’s cotton farming families,” said Ronnie Lee, chairman of the National Cotton Council.
“The enhancements to the dairy Margin Protection Program contained in the bill would strengthen the program and help pave the way for additional necessary improvements in the upcoming farm bill,” said Jim Mulhern, president and CEO of the National Milk Producers Federation.
House Agriculture Chairman Mike Conaway, a Texas Republican who has been focused on making cotton eligible for PLC, said the Senate provision didn't go far enough: “We have been working on a long-term solution for cotton in the House for over two years. While I’m grateful that Sen. Cochran is trying to resurrect a solution in the Senate, the support levels they have proposed are far short of what’s needed to stop the bleeding in the cotton industry. I look forward to working with Sen. Cochran as we continue looking at all options to provide long-term, meaningful assistance to the cotton industry.”
Cochran referred to the cotton provision as "short-term relief" for growers.
The cotton PLC provision would trigger payments to producers when cottonseed prices fall below $15 per hundred pounds. The cost of the provision was substantially reduced from this spring by reducing the reference price from $15.88. The provision also offsets the cost of the PLC payments by reallocating “generic” base acres and reducing participation in the Stacked Income Protection Plan (STAX) crop insurance program.
The MPP provisions are aimed at lowering the cost of the program to small and medium-size farms and to making it more likely to trigger payments.
Potential payments would be calculated on a monthly rather than bimonthly basis. Premiums for small and medium-size farms would be eliminated on $4.50 and $5 coverage levels and reduced by as much as 80 percent at higher levels. In addition, the size limit for MPP’s lower premium rates would be raised from 4 million pounds to 5 million pounds. That higher limit would allow a farm with about 223 cows to qualify for the lower premium structure. The current limit of 4 million pounds is the equivalent of about 185 cows.
Production above 5 million pounds would continue to pay the substantially higher, Tier 2 rates.
Neither of the provisions is included in the House version of the bill.
The top Democrat on the Senate Agriculture Committee, Debbie Stabenow of Michigan, applauded the provisions. She had resisted adding the cotton provision to the FY17 spending agreement without including assistance for dairy producers as well. "As I’ve said throughout the appropriations process, all farmers must be considered if we are going to make significant changes to farm bill programs," she said.
The Senate Appropriations Committee approved a package of amendments to the FY18 bill on Thursday that would require the Trump administration to nominate an undersecretary for rural development, a rebuke to a key part of Agriculture Secretary Sonny Perdue’s reorganization plan.
Perdue eliminated the position in favor of naming a former Senate aide, Anne Hazlett, as his assistant in charge of the rural development agencies. Sen. Jon Tester, a Montana Democrat who pushed for the amendment to require an undersecretary, said he was still concerned that the administration wouldn’t carry it out.
The committee also adopted, by voice vote, a pair of amendments that would extend a ban on horse slaughter and mandate the labeling of genetically engineered salmon.
For example, the bill would provide $2.55 billion for agricultural research, including $375 million for the Agriculture and Food Research Initiative, maintaining the level provided in fiscal 2017.
The Food for Peace program, which Trump proposed to eliminate, would get $1.6 billion, $200 million more than the House bill. The McGovern-Dole international school feed program, which Trump also wanted to kill, would get $206.6 million.