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The Debate Over the 2018 Farm Bill
The bomb throwers are already trying to blow up the farm program, over a year before a new bill is needed. It’s hardly an early start. In Washington, the clock is ticking toward the 2018 farm bill.
Groups such as the conservative Heritage Foundation want to eliminate crop subsidies and revenue insurance in the name of free markets and equitable treatment of entrepreneurs, in town or on the farm. “Farmers have the means and expertise to manage risk,” says Heritage. “Congress – and the laws it enacts – should show favoritism to none.”
Calls for radical change in farm policy mobilized few followers in the past, and farm groups, early in the “issue spotting” for the new farm bill, expect lawmakers to shore up the current program rather than to make broad changes. That means the ARC and PLC programs are likely to be carried into the 2018 farm law.
Roger Johnson, president of the National Farmers Union, describes the mood, saying, “Let’s work with what’s there. Let’s make it work better.” The NFU wants to nudge higher some PLC reference prices and greatly speed up ARC payments, now made at the end of the marketing year, or 12 months after harvest.
“Pay farm bill payments the year they’re earned,” says Johnson, using the comparison of preliminary payments that were available to growers in the past and calculated at a sizable fraction of the expected total. In those days, USDA made a final round of payments to square accounts with farm program participants.
“PLC will look a lot more attractive to many corn and wheat producers if a new farm bill gives producers a new (enrollment) choice but keeps other provisions as they are today,” says economist Pat Westhoff of the University of Missouri.
Three problem areas are clear for Congress. First, the average yields used by USDA in calculating ARC payments gyrate widely between adjacent counties in some areas. Second, milk prices are in a slump, and the new Margin Protection Program is providing little support to dairy farmers. Third, only a minority of growers have enrolled in the new cotton program built around a revenue insurance policy.
On top of that, season-average prices for this year’s corn, soybean, and wheat crops could be the lowest in a decade. USDA estimates net farm income this year will be 58% of its peak in 2013.
“Our farm bill is like an insurance policy,” says Zippy Duvall, president of the American Farm Bureau Federation. “In the case of the farm economy in 2016, the barn has caught on fire.”
Crop insurance and the farm safety net “are more important than ever,” Duvall writes in an op-ed. Lawmakers elevated the role of crop insurance in the safety net in 2014, but revenue insurance provides less shelter when commodity prices are in a trough.
It looks like farm bill hearings will begin in late spring. Says one farm lobbyist, “That’s the time everybody needs to hit the ground running.”