Farm Bill Future Murky

PHOENIX (DTN) -- There are more questions than answers about the details and timing of the next farm bill debate, two key staffers for the House and Senate agriculture committees told an overflow audience of farmers at the American Farm Bureau Federation's national conference here Sunday.

Congress faces a wave of big-ticket issues in the coming year. The repeal and replacement of Obamacare, confirmation hearings for incoming President-elect Donald Trump's nominees, and an expanding federal deficit all loom over exactly how the next farm policy debate will ensue.

With the agriculture economy on the ropes, Jacqlyn Schneider, minority deputy chief of staff on the Senate side, said farmers will not be forgotten.

"It doesn't mean the farm bill will be neglected," she said.

"We need to start examining policies now and make sure we get them right. We also have child nutrition programs. We have big question marks on how the year will go."

Schneider said the new administration's position on farm programs remains a mystery as Trump has yet to name his agriculture secretary nominee. What's more, Schneider said it's not yet known whether the Trump administration will offer up its own farm bill legislation. That was the case with the George W. Bush administration.

Bart Fischer, chief economist for the House Agriculture Committee, said Congress will have its work cut out on trying to somehow put together a farm bill.

"The biggest hurdle we face is all the other stuff going on in D.C.," he said.

"We don't know who the agriculture secretary will be, Obamacare repeal and replace. We don't know how it will happen, but it will take up legislative time... The big picture with the budget is we owe $19 trillion and that dominated the last farm bill cycle. It will continue to hang over everything we do. Ag is not on the list of things driving the budget."

CROP INSURANCE

While federal dollars spent on crop insurance may spark debate in Washington again, Fischer said the reality is the net interest on the debt alone is 40 times what is spent on crop insurance.

Fischer said it is "baloney" that cutting the crop insurance program would be an effective way to reduce the deficit.

"With SNAP (Supplemental Nutrition Assistance Program) included, we're only 2% of the budget," he said.

The 2014 farm bill contributed $23 billion in cuts to the deficit. Three years later, Fischer said, the cuts made in the farm bill are saving three times more than they were projected to save. In addition, he said, the SNAP program has come in under budget.

"The job we're doing on the ag committees is defensible," Fischer said.

With net farm income down 46% since 2013, he said last year Congress held seven hearings focused on the state of the agriculture economy in preparation for a farm bill debate. The last time farmers experienced such a drop in net income was during the Great Depression, he said.

"What happens going forward we know we need a robust safety net in place," Fischer said. "In '14 times were really good. We need a farm bill because times are what they are now."

FARM BILL ISSUES

There are three issues the next farm bill will need to address, Fischer said.

Cotton may need a better safety net than the 2014 farm bill's Stacked Income Protection Plan that offers some revenue insurance, he said. The National Cotton Council has said it will continue to push for cotton seed to be designated as oilseed. This would allow cotton to be a covered commodity under the Price Loss Program.

"Based on current price there is a piece of the safety net (cotton) is not eligible," Fischer said. "We want to get cotton back in the farm bill."

In dairy, Fischer said, Congress may make an adjustment to the feed factor in the Margin Protection Program. Premiums for MPP are based on futures prices and change with milk and feed prices. He said lawmakers currently are in a listening phase to find solutions to improve the program. The MPP has worked for some dairy farmers and not so well for others.

Fischer said Congress may look at adjustments to the Agricultural Risk Coverage, or ARC, somehow addressing payment variability coming as a result of variability in yields.

Before the holiday break, Congress passed budget appropriations for fiscal year 2017 through April 28. Appropriations for the remainder of 2017 will need to be completed, Fischer said, as well as a 2018 budget and appropriations.

In addition, Fischer said Congress will have to reauthorize Commodity Futures Trading Commission funds. He said the House is expected to move a CFTC bill this week.

Though trade typically is not part of a farm bill debate, he said "there is some concern with the anti-trade talk" coming from the next administration.

In particular, Fischer said there continues to be concern other countries are not following the World Trade Organization rules. He said it is good the Obama administration is challenging China on its minimum support policies on corn, rice and wheat.

According to the U.S. Trade Representative, China has exceeded its 8% subsidy allowance by more than $100 billion in one year.

"That's more than we'll spend on the entire U.S. crop system," Fischer said. "We think the time has come to challenge what they do."

When it comes to regulations, he said Congress will look at what went into effect in the past 60 days and still may be subject to the Congressional Review Act. The House has already voted to move such legislation.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

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