As most are likely aware, the 2018 Farm Bill expired last year and was given a one-year extension to September 30, 2024, followed by another extension coming up on December 31. While farm and ag industry leaders are pressuring the lame-duck Congress to get a new Farm Bill across the finish line before the end of the year, most think it will be pushed into 2025. In the interim, a proposed bill to help shore up farmer finances, the “ Farm Assistance and Revenue Mitigation Act”, aka FARM act, is garnering more support. However, the estimated $21 billion price tag could make it a tough sell to lawmakers.
Even though Congress has returned to Washington, so-called lame-duck sessions – the period between a November election and before the beginning of the new Congress – doesn’t tend to be very productive. What’s more, lawmakers have a pretty full plate of priorities to deal with before the end of the year, including extending the current extension on a full U.S. budget for fiscal year 2025. The current extension expires on December 20. Lawmakers also need to pass additional disaster relief to fund FEMA, as well as tackle a severe funding shortfall for the Department of Veterans Affairs.
At the same time, the Senate and House will be busy holding leadership elections for the next Congress. So far, it looks like only a couple of these votes will be competitive but delays in the process could further delay work on legislative priorities. Keep in mind, over a dozen House races have still not been called so leadership elections will be stalled until those are finalized.
A bipartisan-supported version of the new Farm Bill is ready to go in the House and several lawmakers have said it is a priority. However, just as many have said they expect it to be punted to the next Congress, with some reasoning that farmers would get a better deal under Trump. Bottom line, there doesn’t seem to be much consensus in Congress as to how high the Farm Bill is on the year-end priority list.
It is hoped that when a new Farm Bill does eventually pass, it will include more robust safety net payments. House and Senate Republicans want a 15% increase in so-called reference prices, which would make it easier to trigger subsidy payments. However, even if a new Farm Bill is passed in the lame-duck session or right out of the gates next year, the earliest farmers would receive those higher payments is probably October 2025.
The so-called FARM Act, introduced by Representative Trent Kelly, is designed to help bridge the gap between now and whenever Congress gets its act together. The proposed legislation would give farmers payments based off losses on eligible acres. Sponsors say the roughly $21 billion legislation could give farmers some much-needed support, but others say the price tag makes it unlikely to pass.
Farm CPA Paul Neiffer explains that unlike ARC and PLC payments, which are based solely on base acres, the FARM Act goes off of what you planted for 2024. “If you planted 1,000 acres of corn in 2024 and 1,000 acres of soybeans, you’re going to be paid based on 1,000 acres of corn and 1,000 acres of soybeans. Plus, you’re going to then be eligible for an additional 50% of the acres that were prevented from being planted,” Neiffer says. Kelly’s bill allows payments of up to $350,000 per farmer. The farm program typically sets a limit of $125,000 per farmer.
Gary Schnitkey, an ag economist at the University of Illinois, says their calculations show the corn payment would be $100/acre, soybeans $49/acre, wheat $85/acre, and cotton $200/acre. But, he warns that any such payments won’t happen quickly, “so don’t pencil it in, but it is something to keep in mind.” Schnitkey also believes that even if the FARM Act ultimately fails to pass, some type of ag relief package will likely be tied to a disaster relief bill.
According to American Farm Bureau, despite the elevated commodity prices in 2023, many farmers still lost money on every acre they planted due to high input costs; but only approximately one in 10 base acres will receive a Title I payment. In 2024, farmers will face even steeper losses. They will lose significant money on every acre they plant and the outdated safety net will not catch them. (Sources: American Farm Bureau, Brownfield Ag, AgNet)
