The Van Trump Report

Update on the Farm Bill – Will Congress Pass a New One Before Farm Bill 2018 Expires?

Update on the Farm Bill – Will Congress Pass a New One Before Farm Bill 2018 Expires?
The current Farm Bill, inked in 2018, expires in just over two months. Unfortunately, many lawmakers are expressing doubts that a new one will be completed before the September 30 expiration date. Revisited every five years, the Farm Bill covers a broad range of agriculture and food issues, including crop insurance, rural development, and the Supplemental Nutrition Assistance Program (SNAP). It’s also the most significant piece of Federal legislation for farmers and ranchers, as well as the nation’s food supply.

The House and Senate Agriculture Committees have begun drafting sections of their respective reauthorization bills but lawmakers have said full drafts are unlikely before September. That’s partially due to the August recess, with both chambers of Congress on break during the last two weeks of the month. For what it’s worth, most ag economists doubt a Farm Bill will be passed in 2023, according to the June Ag Economists’ Monthly Monitor.

Some members of Congress have said they expect the current Farm Bill will need to be extended past September 30 but remain optimistic that a new bill will ultimately pass this year. House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., says his committee is concentrating on a digital asset market structure bill first but insists it has not slowed work on the Farm Bill. Thompson said he is aiming to hold a markup on the Farm Bill by mid-September, with a draft released before the markup. As for whether the bill can realistically be passed before September 30, Thompson says that is up to leadership but acknowledged that Congress was “probably going to need an extension.”

Another hold up appears to be the Congressional Budget Office (CBO), which House and Senate Agriculture committee leaders have complained is slow in responding to requests for scores on farm bill provisions. In February, the CBO baseline indicated the 2023 Farm Bill would cost nearly $1.5 trillion, making it the most expensive on record. SNAP funding is estimated to account for more than 80% of mandatory spending over 10 years.

The biggest priorities for farmers and ranchers are the bill’s risk management tools, particularly crop insurance. Ag groups and industry leaders have been lobbying hard for strengthening crop insurance programs. The American Farm Bureau and others are pushing for an increased reference price for all Title I commodities with no reductions in premium cost share.

Commodity risk management program payouts under the 2018 Farm Bill totaled $33 billion from 2018 to 2023, and crop insurance indemnities totaled roughly $27 billion over 2021 and 2022. These totals do not account for the roughly $90 billion in ad-hoc disaster aid distributed over that same time period, mostly during the COVID-19 pandemic. The 2018 Farm Bill was projected to cost $867 billion over 10 years when enacted, and has cost roughly $428 billion over the past five years.  
Sam Kieffer, Farm Bureau’s vice president for public affairs, says they also want the current Farm Bill to be extended if the law expires before a new one is created. The Agriculture Improvement Act of 2018, aka the 2018 Farm Bill, modified the structure of farm commodity support, expanded crop insurance coverage, amended conservation programs, reauthorized and revised nutrition assistance, and extended authority to appropriate funds for many U.S. Department of Agriculture (USDA) discretionary programs through FY2023. 

Currently, if the Farm Bill lapses, ag policy reverts to parity pricing rules from the 1930s. Meaning federal formulas, rather than supply and demand, would set commodity prices based on farmers’ input prices. Some programs would cease to operate unless reauthorized, while others might continue to pay only existing obligations. (Sources: Roll Call, Congressional Research Service, Reuters)

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