Farm Bill Heads to President's Desk

Legislation Ensures Some Certainty and Stability for Commodity Producers

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The 2018 farm bill heads to President Donald Trump's desk after two strong votes in the House of Representatives and the U.S. Senate over the past two days to finalize the legislation. (DTN photo illustration)

OMAHA (DTN) -- The 2018 farm bill that had divided the House last summer over food-aid issues ended up passing easily on Wednesday as Congress sent the legislation on to President Donald Trump for his signature.

The bill, the Agricultural Act of 2018, passed 369 to 47 on Wednesday afternoon with 182 Republicans joining 187 Democrats supporting the bill, drawing applause in the House chamber after passage.

The House vote follows an 87-13 Senate vote for the bill on Tuesday, reflecting strong support in both chambers of Congress for the compromise legislation that secures food production, conservation and rural economic development priorities for the country.

Prior to the vote, House Agriculture Committee Chairman Michael Conaway, R-Texas, told colleagues during a floor speech that farmers and ranchers are going through a difficult time with net farm income down 50% from five years ago. He noted the capital that farmers have eaten through and the economic pressures farmers may face. Conaway said he was especially distressed over the rise in farmer suicides.

"This bill will help alleviate that," Conaway said in his closing remarks, getting emotional.

Conaway earlier pointed to devastation from hurricanes, wildfires and drought that has hit some areas of the country, including his own district. Conaway also pointed to subsidy challenges in China, which he described as "rampant cheating" in subsidy limits.

"China recently over-subsidized just three crops by more than $100 billion in a single year," Conaway said. "Put in perspective, China spent more money on excess subsidies in a year than the entire U.S. safety net -- covering all commodities -- will cost over roughly two farm bills. This is why passage of the farm bill is so important."

These stresses, as well as the trade disputes resulting from tariffs, weren't enough to stop people and groups from both extremes on the left and the right from maintaining the bill should still be opposed. Some organizations had demanded Congress reform the Supplemental Nutrition Assistance Program (SNAP), while others wanted reductions in farm programs and crop insurance.

Specific demands by House leadership to use the farm bill as the first piece of legislation for entitlement reform through tighter work and job-training requirements nearly broke the bill last summer. At that time, every Democrat voted against the legislation, while other Republicans declined to support it because they wanted even tougher reforms.

The SNAP provisions were toned down and largely removed in the conference report. House negotiators also were able to keep more provisions in the House version of the commodity programs that expanded family-member eligibility to cousins, nieces and nephews while also pushing back on tighter actively-engaged requirements that at least some senators had pushed for.

DTN has highlighted several major provisions for farmers over the past few days. Read more at… and….

"This bill will provide needed certainty to farmers and ranchers," said Rep. Collin Peterson, D-Minn., who will become chairman of the House Agriculture Committee in January. In particular, Peterson noted the dairy policy in the farm bill, which reflected a major overhaul following weaker provisions in the 2014 farm bill.

"The economic downturn in farm country has hit dairy probably hardest of all," Peterson said, noting that his home state, Minnesota, is losing two dairies a day.

The cooperative Dairy Farmers of America issued a statement after Wednesday's vote thanking Congress for the changes made to the dairy safety net. The bill includes higher protection levels for dairy farmers under the Dairy Margin Coverage program and also has provisions allowing milk donations to food banks and more incentives for milk purchases for people on SNAP.

"With the stress dairy farmers have been under the last few years, this bill, with improved risk management tools, is welcome," said John Wilson, senior vice president and chief fluid marketing officer at DFA. "We hope that a rapid approval of the bill will provide our farmers with a bit of relief and more options as we head into 2019."

Members of the House Agriculture Committee from both parties also defended their final bill leading up to the vote. Rep. Frank Lucas, R-Okla., noted that, since the 1930s, the goal of the farm bill has been "making sure we all eat cheap, well and safe." But partisan forces outside of the committee on each side challenge those goals, he said.

Rep. David Scott, D-Ga., who had blown up during the committee markup of the farm bill over cuts to 1980s land-grant African-American colleges, on Wednesday called the legislation "a great farm bill" representing "bipartisanship at its best." Scott pointed to $80 million in funding added to the final bill specifically for those black colleges.

Following passage of the farm bill, Agriculture Secretary Sonny Perdue issued a statement calling the bill "good news because it provides a strong safety net for farmers and ranchers, who need the dependability and certainty this legislation affords."

Still, Perdue added that there were "missed opportunities" because the Trump administration didn't get everything it wanted in the forestry title or the work requirements on SNAP, which President Trump had championed. Nonetheless, Perdue made it clear he backed the bill.

"I commend Congress for bringing the Farm Bill across the finish line and am encouraging President Trump to sign it," Perdue said.

The farm bill largely leaves crop insurance operating as it does now, while several provisions were included in the final bill to tweak the Price Loss Coverage and Agricultural Risk Coverage programs. PLC reference prices are changed to use a five-year Olympic average of prices that would allow reference prices to increase as much as 15% for commodity crops. The higher reference prices would be used for both the PLC and ARC programs.

After 2021, farmers would also be allowed to switch crops annually between ARC and PLC as well. In 2020, farmers will also have the option of updating yield data for each commodity up to 90% of the average yield for the farm from the 2013-17 crop years.

The bill also requires ARC payments to be calculated on the physical location of each farmer's tract rather than administrative counties to determine payments.

The bill also raises Commodity Credit Corp. marketing loan rates for crops. It also raises Farm Service Agency operating loans, loan guarantees and farm-ownership loans.

Groups were highlighting other provisions that directly affected their efforts. The American Coalition for Ethanol, Environmental Entrepreneurs, the National Corn Growers Association and the Natural Resources Defense Council got together to thank Sen. Ron Wyden, D-Ore., and farm-bill conferees for including a new pilot in the Environmental Quality Incentive Program (EQIP) to promote and document the benefits of farming practices that improve soil health.

"This new EQIP provision provides the tools to incentivize farmers to adopt smart soil-management practices that improve soil health to increase drought resiliency, improve nutrient utilization, and enhance soil carbon sequestration," said Keith Alverson, a South Dakota farmer and NCGA board member. "EQIP is a critical conservation working lands program most adept at helping farmers adopt new practices that improve production while enhancing ecosystem benefits related to agriculture. As a farmer, I have seen the benefits of these practices on my own farm and look forward to working with USDA to document these environmental values on a larger scale."

With trade being a major topic, the farm bill includes an assurance that the Market Access Program has at least $200 million in annual funding to help grow foreign markets.

Animal agricultural groups and the National Association of State Directors of Agriculture were pleased with the $300 million in funding over 10 years for animal-health programs, including the creation of a vaccine bank that will largely focus on protecting the livestock industry from the risk of a foot-and-mouth disease outbreak.

"A year ago, it didn't look like we were going to get that in the bill, but animal health is just critical for a state like Nebraska, which is one of the biggest beef-export states," Rep. Don Bacon, R-Neb., said in an interview. "Our beef and pork producers were really critical in getting that done."

Organic farm groups also pointed to several provisions they advocate, such as tightening traceability of organic-labeled imports from around the world to ensure they truly are grown using organic standards. The bill also boosts funding for USDA's National Organic Program, as well as more than doubling funds for the Organic Research and Extension Initiative.

The Specialty Crop Farm Bill Alliance pointed to $25 million in funding to combat citrus greening and $80 million in funding for the Specialty Crop Research Initiative, a competitive grant program. The farm bill also includes $75 million annually to battle invasive pests and diseases.

And the fledging hemp industry has been non-stop in its praise for full legalization and cultivation of hemp in the farm bill. Hemp Inc., a hemp processor, said the provision could catapult the industry to top $20 billion by 2022.

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Chris Clayton