Ag Policy Blog

Agriculture Secretary Vilsack Says House Farm Bill 'Politically Astute' But Impractical

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Agriculture Secretary Tom Vilsack talks about the farm bill at a summer-school meals event Friday in Omaha. The Agriculture secretary said the House farm bill gives a lot of constituencies what they want, but cuts nutrition programs and offers the biggest boost to the largest farmers. (DTN photo by Chris Clayton)

OMAHA (DTN) -- Agriculture Secretary Tom Vilsack said the House Agriculture Committee did too good a job of trying to satisfy everyone with a bill that boosts spending on farm programs and research.

Speaking on Friday at a summer meals program in Omaha, the secretary also noted the House plan seeks to cut $27 billion from nutrition programs over ten years.

"It's a bill that I think is very politically astute from the standpoint that it offered members of that committee a lot of what they asked for," Vilsack said. He added, "It was fantastic and satisfied a lot of constituencies. Everybody, for the most part, is reasonably happy -- except you have got to pay for it. Therein lies the issue."

The reference price increase helps producers of 22 crops nationally, but also shifts funds from people who need nutrition assistance to larger commodity producers. The bill also provides too much support to the largest commodity farmers compared to farmers who rely on other USDA programs for support, Vilsack said.

The median income for the 10% largest farmers in the country averages around $250,000 a year and those producers have an average net worth of around $4.4 million.

"So, it's that group that gets 60% of the reference price increases," he said.

The House bill, which cleared the committee in a bipartisan vote in late May, would increase the statutory reference price for crops by 10% to 20%. Boosting the statutory reference price will then boost the calculation used to create the effective reference price.

Corn would go from $3.70 a bushel per acre (bpa) to $4.10, nearly an 11% increase.

Soybeans would go from $8.40 bpa to $10 bpa, up 19%.

Wheat would increase from $5.50 bpa to $6.35 bpa, up 15%.

Rice reference prices would increase from $14 per cwt to $16.90 per cwt, up more than 20%.

The Agricultural Risk Coverage guarantee would increase from 86% to 90% of benchmark revenue. The payment rate for ARC would also increase to 12.5% of benchmark revenue.

Increases maximum payment rate for ARC-County and ARC-Individual to 12.5% of benchmark revenue.

The House bill also plans to restrict the Agriculture secretary's authority to use the Commodity Credit Corp. (CCC). Vilsack noted some of those funds are used each year to help support local food banks -- "billions of dollars in the last several years." The secretary also pointed out there is a conflict between the chairman of the House Agriculture Committee and the Congressional Budget Office about just how much would be saved by restricting USDA's use of CCC dollars.

"So, we've got a situation where -- I'm using a Harry Potter example -- but they have got an invisibility cloak spread over that deficit to make it disappear. Well, there are some deficit hawks that say, the deficit's still there, I'm not voting for that."

Still, Vilsack said the bill is politically astute for House members because it gives them the ability to talk about all of the things they support in the farm bill without talking about how to pay for it. "I don't fault the House for what they have done, which is very smart. But I just think it's created a circumstance where it's not going to get done," Vilsack said, adding, "But as a practical matter, there aren't the votes to get it through the process."

Delving deeper into the commodity title, Vilsack said there are more than 100 different crops grown nationally, but the biggest boost in reference prices is reserved for a handful of the 22 crops that are eligible for reference prices.

"The predominant concern that's been expressed is in rice and cotton, which are important commodities, [but] certainly in terms of the number of farmers we're not talking about a significant number and in relationship to those, or corn or soybeans or fruits and vegetables," the secretary said.

The current system of farm support has continued to lead to fewer overall farmers nationally and a greater loss of farmland in the process.

"And the system itself is structured in a way that it's going to perpetuate that unless we begin to create more revenue opportunities and a fairer system for farmers across the board," Vilsack said.

The Senate Agriculture Committee right now also appears stalled as each party has drafted a separate "framework" for programs. Talking about the plan offered by Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., Vilsack said her bill, "is a very practice bill, but it doesn't do as much as some would like. Therein lies the rub. You've got a practical bill that doesn't satisfy a lot of folks and you have a House Ag bill that people love, except that you can't pay for it. And right now that's where things are. And I don't know if that's going to change until there's a recognition that we have to either lower expectations or we have to find outside money from some source that doesn't cross red lines."

He added, "I think it's important to support production agriculture. We need to continue to do that for sure, and that's really important; but at the same time, can we be smart enough to create a companion program so that those small and midsize folks are benefiting from multiple sources of income?"

The secretary pointed to USDA's work to create climate-smart agriculture programs, incentivize a rural bio-product economy, and boost farm revenue through local food systems such as Farm to School programs. He also pointed to the "terrific demand" for renewable energy projects through the Rural Energy for America Program (REAP).

"I think we're onto something. I think people are interested in it. We're seeing a lot of uptake and I think we can be smart enough to create a system that's beneficial to farmers," he said.


Iowa, Minnesota and South Dakota have been hit hard by flooding over the past few weeks and Vilsack also told local reporters the Farm Service Agency (FSA) and Natural Resources Conservation Service (NRCS) have several programs available to producers and landowners in a flood disaster. The Noninsured Crop Disaster Assistance Program (NAP) pays for crops and trees not necessarily covered by traditional crop insurance programs. The Emergency Livestock Assistance Program (ELAP) and Livestock Indemnity Program (LIP) can help compensate livestock producers for losses. The Emergency Conservation Program (ECP) helps with debris removal. The Environmental Quality Incentives Program (EQIP) can be used for repairs after a disaster. The Farm Service Agency also has loan programs producers can tap as well.

"Our teams are prepared to administer any and all of these programs," he said.

Vilsack said Friday the extent of damage to crops and livestock won't be known until the floodwaters recede and more assessments can be done. "The magnitude of what we're seeing I think is more reflective of a more volatile climate. The result of that is the need, obviously, for more programs and resources," Vilsack said.

Chris Clayton can be reached at

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