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How Tough Times Could Key a Farmer-Friendly 2018 Farm Bill
Farmers were cruising along with high grain and oilseed prices when Congress and former President Obama signed the 2014 Farm Bill. Unfortunately, times have changed, with bargain-basement commodity prices keying tough farm economics.
“I don’t think this farm bill as written is set up to handle those problems,” says Rep. Collin Peterson (D-MN). “Part of the reason we are in this situation is the way we did the farm bill in the first place. We never should have written a farm bill (considering) where prices were at the time, but this is now what we have to deal with.”
Peterson and others gave their view on the current situation and how it will impact debate over the upcoming 2018 Farm Bill at last month’s North American Agricultural Journalists meeting in Washington, D.C.
Good Crops Help, Hurt
On individual farms, high yields remove some of the sting from low commodity prices.
“We dodged a bullet last year with good crops,” says Peterson. “We see some pressure in terms of financing, but not anything like it could have been with an average or poor crop.”
In the big picture, though, huge crops worsen the problem by boosting already burgeoning commodity crop supplies. With little hope for a turnaround in prices, Peterson worries about farmers’ finances if an average or poor crop results in 2017.
“If that happens, there will be some significant problems,” he says.
ARC vs. PLC
Offering both the Agriculture Risk Coverage (ARC) program and the Price Loss Coverage (PLC) program in the 2014 Farm Bill is one reason farmers are now struggling, says Peterson. ARC payments were triggered by much higher prices than PLC. However, PLC gave more protection when prices cratered, as they are now, says Peterson.
“The bill (Rep.) Frank Lucas (R-OK) and I brought to conference (between the U.S. House and U.S. Senate) did not have an ARC program in it,” he says. He says PLC provided a better safety net, even though target prices were not where they needed to be, says Peterson.
“At end of the day, the insistence on having two programs resulted in an inadequate safety net,” he says. “We had significant payouts in ARC during a time when people were doing relatively well.”
That’s not the case now. “I pointed this out to people two years ago in my district and they said, ‘Well, the reason we did it is we don’t trust you guys to maintain what you said you would do. So, we (opted to) take the money and run.’”
Sen. Pat Roberts (R-Kansas) doesn’t expect there to be a radically new farm bill in 2018.
“There has been a time and place for someone to say, ‘Maybe we ought to shake the tree and come up with something new.’ I knew someone who did that (Roberts himself with the 1996 Freedom to Farm bill), but this isn’t 1996. Predictability and stability is what farmers need.”
Mary Kay Thatcher, American Farm Bureau senior director for congressional relations, thinks the political situation bodes well for a strong 2018 Farm Bill. The 2018 midterm elections pose a daunting challenge for Democrats, as they must defend 25 seats. (Sen. Angus King (I-Maine) and Sen. Bernie Sanders (I-Vermont) are independents, but caucus with the Democrats.) Republicans must defend only eight seats.
All seven senators on the Senate Agriculture Committee up for reelection are Democrats, including Sen. Debbie Stabenow (D-Michigan), the ranking committee member. Also up for reelection are Democrats in farm states like Wisconsin (Sen. Tammy Baldwin) and Missouri (Sen. Claire McCaskill). This gives Democrats incentive to work with Republicans to develop a strong farm bill, says Thatcher.
What’s Up in the House
That’s assuming, of course, the U.S. House can pass a farm bill. On the surface, this seems doable, given a House majority of 238 Republicans. Within that majority, though, contains 32 (this can vary) Freedom Caucus members. Members of this invitation-only caucus tilt strongly conservative or libertarian.
“Two-thirds of them won (in their House districts) by 60% of the vote,” says Thatcher. “They do not have to go home and worry about being reelected. If these members vote against a farm bill, passage becomes much more difficult.”
What could complicate matters, too, are farm bill amendments such as those on payment limitations or reducing crop insurance subsidies for those with over a $750,000 adjusted gross income, she says. http://bit.ly/2oGASPg
There’s also a rural-urban split. Thatcher says there are 34 Congressional districts where more than 50% of constituents live in rural areas. Meanwhile, 55 congressional districts have 0% rural residents. To pass a farm bill, urban lawmakers will need to be convinced to vote for it.
Thatcher believes that if nutrition (including food stamps) is again part of the farm bill, everyone who voted for it in 2014 will likely vote for it again.
“I come up with 184 votes,” she says. “In the House, you need 218 votes. It’s not far between 184 and 218. There are new members who have never voted (on a farm bill), so my premise is that as long as a good bill is written, it will not be hard to get passage of a farm bill.”