House Releases Farm Bill Draft

OMAHA (DTN) -- Congressmen have been quick to point out 2018 farm income is projected to be less than half of what it was five years ago, but the farm bill draft rolled out Thursday by House Agriculture Committee leadership makes few changes to the safety net for most commodity producers.

Some key changes in the farm bill plan for farmers:

-- The Agricultural Risk Coverage program would use crop insurance data to determine county yields. Price Loss Coverage would adjust reference prices when markets improve and allow farmers affected by droughts to update yields. Farmers would also be allowed to change elections for ARC or PLC.

-- Marketing loans are maintained and the sugar policy remains the same.

-- Crop insurance is held harmless with few or little changes made.

-- The Conservation Stewardship Program would end with no new sign-ups and current CSP contracts allowed to expire. To offset some of the losses, the Environmental Quality Incentives Program is beefed up.

The House Agriculture Committee plans to mark up the farm bill next week with partisan battle lines already drawn over job-training requirements in the Supplemental Nutrition Assistance Program.

The key trick for House Agriculture Committee leadership has been to draft a bill that doesn't spend any more money than the 2014 legislation. Despite the constraints, the bill seeks to maintain key programs to promote U.S. agricultural products overseas. The bill also adds investment for livestock disease preparation, including setting aside $150 million to create a new livestock vaccine bank to help prevent the spread of major contagious livestock diseases.

The new bill comes as the Trump administration is also considering whether to provide trade-offset payments to farmers affected by the ongoing trade disputes between the U.S. and China, as well as the renegotiation from the North American Free Trade Agreement. Trump met with several Republican governors and senators Thursday at the White House to discuss agriculture and trade.

The latest USDA forecasts -- released just before the Chinese tariff battle heated up -- show overall net farm income is projected at $59.5 billion in 2018, down from a high of $123.8 billion in 2013. If the numbers hold, it would be the lowest farm income levels since 2006.

OVERHAULING DAIRY SAFETY NET

Farm income changes vary by commodity, but dairy farmers are projected to see a 19% income decline this year. The fourth year of low prices is leading to a crisis among dairy farmers.

"There's too much milk and not enough processing, basically," said Patti Edelburg, a Wisconsin dairy farmer and vice president of the National Farmers Union. "The supply is way over demand, and milk is a product you have to sell. You can store corn for quite a while, where milk is obviously a perishable product, and you have to sell it."

Dairy farmers could be the big winners in new commodity programs. The much-panned Margin Protection Program is overhauled and renamed the Dairy Risk Management (DRM) program. The changes, influenced heavily by House Agriculture Committee Ranking Member Collin Peterson, D-Minn., build on an $880 million boost in funding for the dairy safety net passed in the farm bill. Under the plan, the coverage costs for DRM would be 9 cents per hundredweight on the first 5 million pounds of milk covered.

"It's kind of a Band-Aid," Edelburg said. "I'm not sure it's enough to stop a lot. It will bring in some extra cash, but prices really need to change to make dairy farming a lot more viable ... I mean, this is a good start, but a lot more needs to be done on dairy."

Edelburg noted dairy farmers are getting suicide prevention hotline letters inserted with their milk checks. Wisconsin saw more than 500 dairy farms close last year alone.

Even as trade negotiators seek to crack the wall on Canada's supply-management system for dairy, Edelburg said Wisconsin farmers have been meeting and learning from Ontario, Canada, about the Canadian system. U.S. farmers' all-milk price is under $16 per cwt while their Canadian counterparts are averaging $27 per cwt.

"If you really want to have a control on the price, you have to have some kind of supply management in there," Edelburg said. "There are just too many processors against it."

SNAP BATTLE ONGOING

Much of the battle over the farm bill is already concentrated on nutrition programs. House Republicans are tightening up rules for people defined as able-bodied without dependents, a population that includes roughly 3.5 million people. The farm bill would prevent states from getting work and job-training exemptions for those people. At the same time, the GOP is planning to expand investment in federal job-training programs.

As House Agriculture Committee Chairman Michael Conaway, R-Texas, rolls out his bill, he's taking his case to the public that tighter work requirements for SNAP recipients will improve their quality of life. Conaway shot a video released earlier this week and he co-wrote an op-ed in USA Today, highlighting the link between poverty and lack of job skills. Conaway's press team also sent out an editorial Thursday by the Wall Street Journal championing that work and job-training requirements would "help the able-bodied get off the dole."

Peterson and other House Democrats have sharply criticized the GOP plan for SNAP. Peterson has gone to social program offices in Minnesota and North Dakota, and he said his takeaway is the GOP plan "will not work and is a waste of money." Peterson said the federal government now spends money on 200,000 job-training slots, but would increase those slots to up to 3 million people.

The SNAP plan would essentially require people who draw $80 to $130 or so in SNAP per month to go to 20 hours a week of job training. "Basically, it's designed to be a hassle factor so people will just drop out of the program," Peterson said earlier this week. "That's basically, from what I can tell, the purpose of it."

The Senate also is unlikely to do anything similar. Senate Agriculture Committee Chairman Pat Roberts, R-Kan., has no plans to include more job-training requirements in the Senate bill. Sen. Debbie Stabenow, D-Mich., said such plans would disrupt the bipartisan focus needed to pass a farm bill in the Senate.

The House Agriculture Committee farm bill text can be found here: https://goo.gl/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/BAS)

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