Washington Insider -- Tuesday

Farm Bill Expires

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

White House Eyeing October Iowa Stop for Biofuels Announcement

President Donald Trump is expected to use an appearance in Council Bluffs, Iowa, on Oct. 9 as the format to announce that he is instructing EPA to move ahead on allowing year-round sales of E15.

The action also is expected to be in combination with other potential changes to biofuel policy, with indications are that the additional actions will focus on reducing volatility in the market for Renewable Identification Numbers (RINs).

Reports indicated the effort will focus on potentially limiting the level of RINs that can be held/traded by those not needing to prove compliance with the Renewable Fuel Standard (RFS). It appears any action on E15 will involve EPA seeking public comment and any year-round E15 action still could likely end up being challenged in court.

Trump addressed the issue in remarks at the White House Monday on trade, noting there would be “something very important in Iowa." Trump thanked Sen. Joni Ernst (R-Iowa) for attending the White House event, and he added: “We will be doing something very important in Iowa."

CRP Enrollments Halted With Farm Bill Expiration

Expiration of the 2014 Farm Bill means that USDA will not enroll any new acres into the program and the program now has far less than 24 million acres in it.

Until a new farm bill is passed or the current law is extended or some other action is taken, the Farm Service Agency (FSA) will not approve any new CRP contracts or process offers for enrollment for all CRP signup types, and they will not authorize any CRP contract revisions or corrections.

Payments under the CRP program will be issued starting today, but that will be about the extent of what can happen.

As of the close of July (latest available data), there were 22.63 million acres in CRP, including 1.35 million acres enrolled via the continuous signup 50 that was held during Fiscal Year (FY) 2017. USDA said that another 20,269 acres have been enrolled via the continuous signup 51 for FY 2018 during a signup that ran from June 4 to August 17. It is not clear how many more acres have been enrolled via that signup other than the 20,269 acres USDA has confirmed were enrolled.

The other thing that will happen for the CRP is that contracts covering 1.42 million acres will expire as of September 30. If no other new acres entered the program under the continuous signup 51, that would pare CRP acres to 21.21 million acres. But that figure also could be impacted by the number of CRP contract holders that opted to take a one-year extension offered to those with expiring contracts of 14 years or less.

It would appear the 21.21 million acres would be a minimum level of ground that is now in the CRP.

Washington Insider: Farm Bill Expires

With NAFTA now including Canada, but the name will change – and there and there is uncertainty in some quarters about allowing some farm programs to expire.

This is an old debate, mainly because the bill is so large and complex. This time, although “dozens of programs for military veterans turned farmers, small rural businesses and expanding foreign markets for agriculture could end, at least temporarily, if the expiring 2014 farm bill is not extended.” Still, there is little effort being made to extend the old bill.

Senate Agriculture Chairman Pat Roberts, R-Kan., said last week he thinks that it will be difficult to finish up the replacement draft get it enacted a replacement for the current law before the midterm elections in November.

Still, he told Roll Call he wants to avoid a farm bill extension because interest groups “will use the time to lobby more for their positions” and make it more difficult for Roberts and his ranking member, Sen. Debbie Stabenow, D-Mich., along with House Agriculture Chairman Michael Conaway, R-Texas, and ranking member Rep. Collin Peterson, D-Minn., to reach a consensus.

The four are the principal negotiators trying to bridge differences between the House and Senate versions of the farm bill.

Major programs such as crop insurance and the Supplemental Nutrition Assistance Program would continue without an extension or new bill because they have permanent authority and funding baselines, Roll Call says. Funding for some other farm programs would expire over several months, with the dairy program becoming the major program to lapse, in December.

Others, however, such as the Conservation Reservation Program, have permanent funding baselines but not permanent authority. That means they would continue to operate but could not approve new contracts, issue new block grants or do anything beyond honoring prior agreements.

An additional 39 so-called “orphan” programs identified by the Congressional Research Service would lose authorization and mandatory funding without reauthorization. Spending for this group totals $2.8 billion over the five-year, $489 billion farm bill.

“While this total may be a relatively small fraction … the effect may be particularly important to specific farm bill titles and to the programs’ beneficiaries,” CRS said. “Notable programs among this group include certain conservation programs; most of the bioenergy (including biofuels), rural development, and research title programs; various nutrition title pilot programs and studies; organic agriculture and farmers’ market programs; trade promotion programs; and outreach to socially disadvantaged and military veteran farmers.”

Last week, Peterson said he was more optimistic than ever that the principals were closer to resolving key differences on the new bill, but that more time is needed. He said differences still exist on Title 1, which includes contentious limits on farm subsidy payments.

Like Roberts, Peterson said he sees no need for an extension if they reach an agreement soon or are close to a compromise, but supporters of the “orphan” programs think otherwise.

“It’s a bit shortsighted to say there’s no impact” from allowing programs to expire for several weeks or months, said Greg Fogel, policy director for National Sustainable Agriculture Coalition.

Small, beginning and minority farmers would lose access to programs designed to help them, Cora Fox, policy associate for the Center for Rural Affairs, said.

“In the absence of a new bill, it is imperative that lawmakers extend current legislation,” Fox said. “Farmers and ranchers across the country rely on important programs that will sunset without an extension of the 2014 farm bill.”

If a lame-duck Congress approves a new farm bill conference report, Fogel said he would expect expired programs to be slow in restarting as USDA implements the wide-ranging legislation.

Peterson said negotiations have focused recently on nutrition program waivers provided to states. These exclude single able-bodied adults without dependents from current nutrition program work requirements and ease limits on how long this group of beneficiaries can receive food aid.

“We’re really down to the waivers,” Peterson said, without providing details.

Roberts also mentioned waivers recently as he talked about trying to reach consensus on SNAP.

“We’re still exploring ways to address the whole nutrition situation, the work requirements,” Roberts said, adding that negotiators are talking about possibly looking into overhauling how states issue work waivers for recipients. “If we can get the waiver challenge behind us, working with the administration would really be very helpful,” Roberts said. “If we do that, I think we could probably get ourselves to a farm bill.”

Changing to the waiver process would give USDA authority to limit waivers given to states and thereby reduce the number of SNAP recipients excluded from current work requirements under the program.

Agriculture Secretary Sonny Perdue recently said restricting state SNAP waivers would be a step forward in ending what he considers to be a weakening of work requirements for a segment of SNAP recipients ages 18 to 49.

So, we will see. Farm bill replacements are often late, sometimes very late, observers say. However, this year’s replacement is especially contentious and the ongoing debate is especially heated leading to strong opposition from some quarters. As a result, this is a debate producers should watch especially closely as it proceeds, Washington Insider believes.

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