Good News: The House & Senate settled on the contents of the new 2018 Farm Bill!
The previous Farm Bill expired at the end of September (it gets updated every 5 years), so the new legislation has been under debate for some time. While the details of the Farm Bill have not yet been released, farmers are on the edge of their seats waiting to see what gets decided in order to make plans for the upcoming growing season.
Hopefully, it will be passed by the end of this week!
According to U.S. Rep. Collin Peterson of Minnesota, the top Democrat on the House Agriculture Committee, the new Farm Bill will mostly maintain the status quo. However, you can expect to see changes in the following areas:
The Conservation Reserve Program (CRP) pays farmers to not produce crops on a given plot of land and instead maintain the land for conservation.
The good news is, under the new Farm Bill, CRP will grow by ~3 million acres. The bad news is the new Farm Bill will cap payments to growers and landowners will not receive extra funding for things like planting pollinator habitats.
The Conservation Stewardship Program (CSP) was the source of many debates. This program “pays farmers to use practices that reduce soil erosion and promote better water quality, such as planting cover crops and altering the way fertilizers and herbicides are applied.”
While it is still not certain if CSP will be weakened, eliminated, or stay in place, the NCRS announced they would be extending the deadline to renew existing CSP contracts into 2019. Until Congress passes the new Farm Bill, the NRCS has no authority to approve contracts. Therefore, with the extension, farmers with initial contracts expiring this year won’t have to start from scratch if the program stays. According to one interview with Rep Peterson, the resulting legislation likely has the program remaining basically the same as before. We will have to wait for the official bill to be certain.
The new Farm Bill will really help smaller scale dairy farmers. The old Farm Bill included a safety net for farmers milking 240 cows or less, but many small dairy farms still went out of business. Not surprisingly, there has been a huge push to improve the Margin Protection Program, which helps farmers with risk management. This program offers protection when the producer’s margin falls below a certain dollar amount (selected by the producer). The improvements will hopefully make small farms less likely to lose money and keep more dairy farms open and in business.
SNAP (Supplemental Nutrition Assistance Program) formerly known as the Food Stamp Program, provides food purchasing assistance to millions of eligible, low-income individuals and families in America. One of the major topics of debate for the new Farm Bill was whether or not to impose stricter rules regarding work requirements in the SNAP program. House Republicans wanted to require all able-bodied individuals, without kids below 6 years old, to work/train/volunteer at least 20 hours a week in order to receive SNAP aid. However, in order to get the legislation pushed through, this amendment was removed.
Another big change coming about in the new Farm Bill will be the exclusion of Hemp from the Controlled Substance Act, making the commercial growing of hemp federally legal. The hemp farmers grow must contain less than 0.3 percent THC, so its fibers can be used to make CBD oil which has a wide range of medical solutions.
The Farm Bill provides funding for all kinds of programs that aid farmers, and a large portion goes towards SNAP. The Congressional Budget Office (CBO) recently projected that Farm Bill spending for all titles will be $867 billion, which is nearly $90 billion less than what was allocated in the 2014 Farm Bill. The projected budget would allocate funds in the following way:
76.5% to SNAP,
23% to titles including crop insurance, conservation and commodity programs, and
< 0.5% to trade, credit, rural development, research, forestry, and energy and horticulture.
What about tariffs?
In addition to the Farm Bill, many farmers are left wondering how the government will address the new stress placed on the agricultural economy by the new trade tariffs. The USDA has already provided $35 million in aid to farmers to offset the effects of the tariffs. In August, the Trump administration said they would pay farmers nearly $5 billion to offset losses from global trade disputes. While this money helps soften the blow, it is not enough to support all the farms that are suffering. “Major U.S. trade partners including China, Canada and Mexico have applied tariffs to billions of dollars’ worth of U.S. agricultural exports in retaliation for tariffs imposed by Washington.” The recent Trump-Xi trade agreement shows promise that China will buy more agricultural exports, but we are still waiting to know exactly what is in the agreement.