Farm Bill debate snags on GOP efforts to cut climate funds and food aid to increase subsidies for cotton, peanuts, rice

"Congress appears unlikely to pass a new Farm Bill by the end of this year amid standoffs over Republicans’ push to extend subsidies to three specific Southern crops — at the potential cost of billions in both food aid and popular farm conservation programs," reports Saul Elbein of The Hill.

The Farm Bill will expire Dec. 31 unless Congress passes an extension, which senators say could be included in a bill to keep the government open after next week. But Agriculture Committee Chairman Glenn Thompson, R-Pa., "said Speaker Mike Johnson had committed December floor time to the farm bill — and gave The Hill a preview of what such a bill might look like," Elbein reports.

The GOP plan would boost subsidies for peanuts, cotton and rice, "the only commodities that won’t get automatic price increases" under current law, Elbein reports: "To pay for this increase, Republican supporters of those programs want to cut food aid and take money from $20 billion previously allocated to conservation payments backed by Democrats, environmental groups and a wide array of farm groups. Thompson argues this move is necessary because 'at least two of those commodities are really upside down right now,' or facing expenses above the market prices of their products — an apparent allusion to cotton and peanuts. . . . According to USDA figures, market prices for cotton in 2022 weren’t high enough to cover the sector’s total expenses."

The plan would raise payments in the Agricultural Risk Coverage/Price Loss Coverage (ARC/PLC) program. "Critics say the proposed increases to the ARC/PLC will direct money only to a few thousand of the nation’s biggest farmers at the expense of programs that benefit all of them," Elbein reports. "Ten percent receive 80 percent of the payments, and 'only the largest of peanut farmers receive more than a few thousand'," Scott Faber of the Environmental Working Group told Elbein.

The plan also has conservative opposition. David Ditch of the Heritage Foundation "argued that in an era when interest payments on the national debt are already dragging on the economy, Thompson’s proposal would lock in permanent payments to farmers who — while they may have had a hard year — are already well-subsidized," Elbein reports.

Jonathan Coppess, an attorney in the University of Illinois agricultural economics department, also takes a longer view. "However bad this year’s picture is for cotton, rice and peanuts, Coppess said, agriculture as a whole is coming off of two record years — and most farms that will qualify for ARC/PLC payments are very large, highly diversified operations that grow many crops, rather than just a few," Elbein writes.

"And even the idea that crops such as cotton are underwater this year relies on counting — as the USDA does — costs that include opportunity or capital recovery costs, or the “expense” of using land, labor or equipment for farming as opposed to using it for something else. This strains the very notion of 'expense,' said Anne Schechinger, Midwest director of the EWG."

USDA releases details for pandemic-related aid to farmers

On Tuesday the U.S. Department of Agriculture released long-awaited details about its $16 billion direct payment program for farmers and ranchers struggling economically amid the pandemic. Farmers and ranchers can start applying for aid Tuesday, May 26; USDA says checks will begin going out as soon as a week later.

"USDA maintained the payment limit of $250,000 per farmer, but the initial $125,000-per-commodity cap was lifted following bipartisan backlash from Congress. Corporations and other entities can get up to $750,000 based on the number of shareholders who spend at least 400 hours on farm labor or management," Ryan McCrimmon reports for Politico's Morning Agriculture. "Because of high demand for aid and a limited pot of money (which Secretary Sonny Perdue, lawmakers and industry groups virtually all agree is too little), the department will send producers 80 percent of their payment and distribute the rest later if the funds haven’t been depleted."

Some crops and livestock aren't eligible for aid because their prices didn't drop by at least 5% since January, including some kinds of wheat, rice and peanuts, older sheep and egg-laying hens, and more. "But the department left the door open to 'reconsider' if those producers can demonstrate their market damage, except for two crops: hemp and tobacco," McCrimmon reports.

Beige Book examines the agricultural economy by Federal Reserve Bank districts; tariffs and trade having impacts

Federal Reserve districts (Federal Reserve Board map)

On Sept. 12 the Federal Reserve Board released its August 2018 Beige Book update, which summarizes commentary on current economic conditions by Federal Reserve district, Keith Good reports for Farm Policy News at the University of Illinois. A few notable entries:

• Most of the Sixth District, which is based in Atlanta and covers much of the Deep South, remains drought-free, but most of Louisiana and parts of Mississippi and Alabama are abnormally dry. Production for rice, soybeans and cotton is up from last year, but peanut production is down. Year-to-year rices paid to farmers in June were down for beef but up for corn, cotton, rice, soybeans, broilers and eggs. 
• Overall crop yields for the Seventh District, centered on Chicago, are set to hit a record high because of good weather. Wheat prices were higher because of lower world supplies, and hog prices were lower because tariffs led to a drop in exports. Dairy farmers were still struggling as milk prices remained low. 
• In the Tenth District, which includes the heart of the Great Plains, farm income and credit conditions weakened and crop prices remained fairly steady after sharp declines in June and July. Corn and soybean prices increased a little in late July but went down again in August. "Uncertainty surrounding trade was a primary concern, and the prolonged weaknesses in the agricultural economy were increasingly impacting farm borrower finances. Although interest rates on farm loans continued to increase along- side weakening agricultural credit conditions, farmland values declined only modestly," Good reports.

2015 Dietary Guidelines recommend cutting back on red and processed meat, sugar, refined grains

The U.S. Department of Agriculture and U.S. Department of Health and Human Services have released proposed 2015 Dietary Guidelines for Americans. The guidelines, released every five years, "provide authoritative advice about consuming fewer calories, making informed food choices and being physically active to attain and maintain a healthy weight, reduce risk of chronic disease and promote overall health," says USDA.

It shouldn't come as a surprise that the 2015 guidelines recommend eating healthier foods, while cutting back on less healthy alternatives. "The committee basically recommended Americans take up a diet that is higher in vegetables, fruits, whole grains, low- or non-fat dairy products, seafood, legumes and nuts," Chris Clayton reports for DTN The Progressive Farmer. "We should cut back on red and processed meats and sugar-sweetened foods, drinks and refined grains. And we should be moderate in our alcohol." (Office of Disease Prevention and Health Promotion graphic)

Recommended cutbacks of certain foods have not gone over well with those food producers, who met this week to give feedback on the Dietary Guidelines Advisory Committee's recommendations, Clayton writes. The North American Meat Institute argued that "lean meat, poultry, red and processed meats should all be part of a healthy dietary pattern because they are nutrient-dense protein."

Shalene McNeill, a nutritionist for the National Cattlemen's Beef Association, "told the committee that its recommendation to exclude lean meat ignores decades of nutrition science," Clayton writes. McNeill said Americans should be encouraged to eat more lean meat, along with fruits, vegetables and whole grains. Grain, sugar and milk producers also expressed displeasure with the proposed rules.

Most nutritionists have embraced the proposed rules but say the key is getting people to adopt them, Andrea McDaniels reports for The Baltimore Sun. Among those rules is limiting sugar intake to 200 or less calories—or 10 percent of total calories—per day. Currently, Americans get about 13 percent of their calories—or 268 calories—from added sugar.

"On the flip side, some foods once shunned are now accepted," McDaniels writes. "Research has found that cholesterol-high foods are no longer believed to contribute to high blood cholesterol, so people can now indulge in shrimp, eggs and other foods that were once off limits, the panel said. Rather than focus on cholesterol, people should curb saturated fat to about 8 percent of the diet."

The panel also said "up to five cups of coffee a day are fine so long they are not flavored with lots of milk and sugar," McDaniels writes. "The panel also singled out the Mediterranean diet—rich in fish and chicken, fruits and vegetables, nuts, whole grains, olive oil and legumes—for its nutritional value."

Russian ban on U.S. poultry hits a $307 million industry; Tyson, cock of the walk, says it can adjust

The conflict between the U.S. and Russia could have major implications on a food export business that accounts for more than $1 billion annually, Roberto Ferdman reports for The Washington Post. Last week Russia said it was suspending food imports from several countries, including the U.S. "in retaliation for sanctions imposed on it by those nations over the past few weeks. The measure, which targets meat, fish, fruit, vegetable and milk products, and will last a year, is expected to hit food supplies and drive up Russian food prices."

Last year U.S. poultry exports to Russia totaled $307 million, or about 7 percent of all U.S. poultry exports, Ferdman notes. Nuts accounted for more than $173 million; the U.S. is the world's largest exporter of pistachio nuts and Russia is the seventh biggest importer of U.S. pistachios. Peanuts don't appear to be included in the ban. (Washington Post graphic)

"American food makers, however, are confident that most of the adjustments they will have to make in the aftermath of Russia's suspension of food imports from the United States will be a matter of redistribution, not downsizing," Ferdman writes. Tyson Foods public relations manager Worth Sparkman told Ferdman, "We're disappointed about the loss of the Russian market, but don't expect the pact to be significant since the volume we ship there can be absorbed by other global markets." (Read more)

Too much rain in South costing farmers billions; consumers could feel effect in higher prices

One year after suffering a drought, the South has now seen too much rain, which could cost farmers billions of dollars in reduced crop yields, and lead to higher prices for consumers. Through June, Georgia's rainfall was 34 percent above normal, South Carolina and North Carolina were about 25 percent above normal, and Alabama’s rainfall was 22 percent high. The rain has hurt the yield or quality of crops such as peaches, tobacco, and watermelon, and there is fear it will hamper pecans and peanuts, Kim Severson reports for The New York Times. (Times photo by Grant Blankenship: A Georgia watermelon farm that typically yields 60,000 pounds of melons per acre had less than 30,000 an acre this year)

 "Day after day, the rains have come to a part of the country that relies on the hot summer sun for everything from backyard tomato sandwiches to billions of dollars in commercial row crops, fruit and peanuts," Severson writes. "Although the total cost to farmers has yet to be tallied, agricultural officials in several states in the Deep South predict severe losses this year that could be in the billions of dollars." 

Peaches in Georgia are too big and misshapen, and aren't sweet enough, tomatoes in Tennessee are splitting, tobacco in North Carolina is drowning, some watermelon farmers have lost half their crops, and wheat is sprouting too soon, Severson writes. "Mold is growing on ears of corn, and in some fields entire stalks have toppled. Late blight, a funguslike pathogen, is creeping into tomato fields early and with unusual vigor." (Read more)

With forecasts calling for more rain, and a drought in the West. "That could mean higher prices at the grocery store for staples such as melons, tomatoes and cucumbers," Janet Shamlian reports for NBC News. Bernard Weinstein, an agricultural economist at Southern Methodist University in Dallas, told Shamlian, “I would expect to see average prices for fruits and vegetables maybe 10 percent higher this fall than they were in the spring or where they are right now just because there’s going to be less supply available.”

Bad harvests could affect entire rural communities. Georgia farmer Duke Lane told Shamlian, "We were picking in water for most of the summer. And so that’s a problem for the peaches — not being picked in the proper time. It’s gonna hurt cause you know money that’s made here rolls over to the community about seven times. That money’s going to be missed.” (Read more)

Midwest-South conflict among Republicans could derail Farm Bill; Obama issues strategic veto threat

UPDATE, 6:55 p.m.: "The White House warned Monday that it would veto the House farm bill as it now stands and signaled strongly that the fastest path to some compromise this summer would be by taking savings from crop insurance to offset Republican-backed cuts from food stamps, Rogers reports. "The most severe of the food-stamp savings would come from re-imposing tighter income limits and an outdated asset test that could force more than two million beneficiaries off the rolls. The estimated savings are $11.5 billion over the next 10 years, and the administration made note that its own crop insurance reforms could save an almost equal sum, $11.7 billion. . . . The administration’s statement seemed designed to serve two purposes: put down a veto marker that will give liberal Democrats some comfort but at the same time try to keep the process moving into conference with the Senate."

As the House version of the Farm Bill heads to the floor Tuesday, corn and soybean lobbies are "backing a Midwest floor challenge to the new price-loss program crafted by the House Agriculture Committee, which is already struggling to win what’s expected to be a close vote on final passage," David Rogers reports for Politico. "Adding salt to the wound was Friday’s release of a paid-for academic paper commissioned by the Environmental Working Group but also rooted in the Midwest and highly critical of the same price-loss program — most important to Southern producers," especially of rice and peanuts.

Rogers writes that the current state of play illustrates "a destructive South-Midwest divide among Republicans and the outsize impact of a small stable of academics hired to punch holes in the current system.  Corn and soybeans are plainly hoping to increase their leverage going into conference with the Senate," which has passed its version. "But in doing so, they could make it harder for [Agriculture Committee Chairman Frank] Lucas to get there in the first place."

The Midwest-oriented amendment would change how target prices are set "and what acreage will be used to calculate payments if markets collapse," Rogers reports. "Left out of the corn-and-beans letter is any mention of the fact that the same two commodities stand to gain richly from a far more expensive 'shallow-loss' subsidy program in the Senate bill. With much of agriculture holding hands just to get across the House floor, the hardball tactics are risky. . . . If the Farm Bill collapses, it’s very unlikely that Congress will again approve a broad extension of current law as it did last winter.
Crop insurance and nutrition programs would survive because of separate authorizations. But there’s broad consensus that commodity programs could be lost given the appetite for spending reductions."

House passage of the bill is in doubt partly because "More than half of the current representatives have never cast a vote on a farm bill," Agri-Pulse reports. Amendments must be filed by Monday, so the Rules Committee can set terms for debate. Wednesday and Thursday, look for "a series of knockdown fights," Rogers writes.

Senate farm bill heads to the floor; House version moving through key committee votes

The Senate Agriculture Committee cleared a new five-year farm bill Tuesday by a speedy 15-5 vote, but heated floor debates are expected over issues such as jobs, crop insurance, food stamps, disaster relief, rural development and the legalization of hemp, an issue not now in the bill but pushed by Republican Minority Leader Mitch McConnell and Sen. Rand Paul, both of Kentucky, with state Agriculture Commissioner James Comer, the state's other statewide elected Republican.

McConnell was the only Republican from the South to vote against the bill in committee, reports David Rogers of Politico. Also voting no were Democrat Kristen Gillibrand of New York and Republicans Pat Roberts of Kansas, Mike Johanns of Nebraska and John Thune of South Dakota.

“This is not a reform bill,” said Roberts, right. “This is a rear-view mirror bill.” He said target prices set for rice and peanuts are “essentially guaranteeing that a farmer profits if yields are average or above average.” (Read more)

The bill calls for the elimination of more than 100 programs, in some cases consolidating programs to save money while still providing needs, reports Bob Meyer of Brownfield. "By closing loopholes, cracking down on abuse and improving program integrity, the bill reduces the deficit without cutting standard benefits or removing any needy family from the program."

The bill should save taxpayers money "while providing farmers with a responsible risk management system that only helps farmers when they experience substantial losses due to events beyond their control," Meyer reports.

The House Agriculture Committee is marking up its own bill today. "The House debate is the more pivotal, especially after the tortured history of the last Congress," Rogers reports. "Chairman Frank Lucas, left, appeared firmly in control and signaled he would work into the night in order to complete committee action. But the Oklahoma Republican must navigate a narrow path between food stamp cuts that have angered Democrats and the bill’s commodity title, which often defies his own GOP leadership. Two votes Wednesday highlighted these tensions, which will surely spill over into House floor debate slated next month."

By 26-20, a narrower margin than last year, the panel endorsed "a new dairy program strongly opposed by Speaker John Boehner," and by 27-17 it backed Lucas's plan to cut $20.5 billion from food stamps and other nutrition programs over the next decade. "Nearly two million beneficiaries could be dropped from the food stamp rolls as a result of the program changes, which would reinstate a $2,000 federal asset test that not been adjusted for inflation since it was first imposed in the 1980s," Rogers reports. The second page of his story has a good, short summary of the dairy issue.

UPDATE, 11:43 p.m.: The House committee approved the bill 36-10.

Senate, House farm bills both have sops to the South; meat lobbies crack egg-rule deal

A new draft of the Senate farm bill gives concessions to pork and beef lobbies over proposed rules for housing livestock, and also includes target prices for rice and peanut producers in an attempt to please Southern Republicans, reports David Rogers for Politico. Meanwhile, the House draft includes its own sop to the South (cotton) and a new dairy program that will divide the Republican majority. (AP photo)

The bill would allow the Midwest Corn Belt to keep its costly crop-insurance program, Agricultural Risk Coverage, but with changes that could cut billions from the 10-year budget score calculated by the Congressional Budget Office, reports Rogers. The standard index will be changed from a five-month average market price to the 12-month average, reducing the cost to the government based on a typical marketing year. It will also "push ARC payments into the next fiscal year since the average 12-month marketing price for corn, for example, won’t be known until past Sept 30."

Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., wanted to include new egg-production standards agreed on by animal-welfare groups and United Egg Producers that "would require larger, enriched cages with perches, nesting boxes and improved manure systems," reports Amy Mayer for KCUR in Kansas City. Beef and pork lobbies, fearing the next steps might be new rules for housing cattle and hogs, fought the idea, and it was taken out of the Senate bill, Rogers reports.

Soon after the Senate bill was unveiled, House Republicans rolled out their draft measure. It includes "a major rewrite of commodity programs," including a "milk supply management program that has been harshly criticized in the past by Speaker John Boehner." The bill also includes a two-year phaseout of cotton producers' direct payments, which both bills would eliminate for other crops, Rogers notes.

The main financial difference in the bills is the House's proposed $20.5 billion savings by tightening eligibility rules for food stamps, nearly 25 percent more than last year's bill (which did not pass) and much more than the $4 billion mark of the Senate bill. Erik Wasson of The Hill reports that concern centers on the rule that allows people getting federal heating assistance to also receive food stamps.

UPDATE, May 13: "The atmosphere on Capitol Hill for the farm bill suddenly seems to be full speed ahead," unlike last year, Jerry Hagstrom reports for National Journal. "The reason the bills are moving seems to be that each chamber has gotten tired of the farm bill hanging on and has something more interesting to move on to." Hagstrom theorizes that Senate Majority Leader Harry Reid wants to get it over with "since exit polls showed that President Obama’s election percentage in rural America went from 50 percent in 2008 to 41 percent in 2012," and "House Republicans want to move on to the periodic reauthorization of the Commodity Futures Trading Commission," so it can "restrict the CFTC’s ability to finalize some of the regulations the agency has proposed" under the Dodd-Frank financial-reform law. (Read more)

Uncertainty about subsidies makes Farm Bureau drop language favored by rice and peanut farmers

During a vote on federal subsidies at the annual American Farm Bureau Federation meeting in Nashville, Southern delegates found themselves in the minority. Agri-Pulse reports that the voting body of the organization voted 179-153 for a motion supporting some types of crop insurance, but removing specific language calling for shallow loss revenue and reference prices, which Southern delegates supported. Such programs most often help Southern peanut and rice farmers. "We're not going to be drawing a line in the sand and promoting a single position," Farm Bureau President Bob Stallman said. The group did support development of a revenue insurance program for peanuts, which the Arkansas delegation amended to include rice.

"It's critically important we have room as we move forward," Indiana Farm Bureau President Don Villwock said. He said the agricultural policy is entering a "new world," and "The crystal ball is as cloudy as it can be," echoing the majority's concern and uncertainty about farm programs. Members kept language supporting "catostrophic loss coverage as a first choice in policy, while noting that, 'If a catastrophic risk program is not achievable, we support producers being allowed a choice of program options,'" Agri-Pulse reports.

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Farm Bill talks still stuck in North-South divide

"With time running out, House and Senate farm-bill leaders were still acres apart Wednesday night after an exchange of offers that only highlighted their competing visions of how to reshape commodity subsidies," with a distinct North-South divide, veteran D.C. agriculture-policy reporter David Rogers writes for Politico.

Senate negotiators have agreed to include rice, peanuts and wheat in a new income-insurance program that would take the place of direct payments, but the Senate's offer, which "covers 75 percent of what had been the difference between the competing baselines for these three crops," is not enough for the House, Rogers reports.

From there, it gets more complicated, but Rogers is the best at explaining it. He concludes, "without a deal soon — the only choice will be no Farm Bill, and starting all over again in a new Congress." To read his story, click here.

Regional, political differences make passage of a new Farm Bill this year unlikely

The prospects for passing a new Fram Bill have dimmed this month, as regional divisions and partisan conflict over the federal budget have complicated negotiations, several members of Congress said while in their districts during the Easter recess.

"Southern farm interests and their champions on Capitol Hill put the rest of U.S. agriculture on notice at the end of last week that they won't play second fiddle to the Midwest," Agri-Pulse reports. "The lack of consensus among commodity groups on safety-net provisions" in the bill is the fault of corn and soybean interests, National Cotton Council CEO Mark Lange told cotton growers in Texas: "As long as the grains and oilseeds are trying to steal several hundreds of millions of dollars annually in support from rice, peanuts and cotton, we're not going to speak with a single voice" on the bill, Lange told the Plains Cotton Growers in Lubbock.

Lange spoke on the same day that Southern farmers said at a House Agriculture Committee hearing in Jonesboro, Ark., "to reject a 'one-size-fits-all' approach to risk management when it drafts the next farm bill," reports Agri-Pulse. (The weekly newsletter is subscription-only, but it offers a four-week trial subscription here.)

Also at the cotton growers' meeting, Rep. Mike Conaway of Texas said Congress faces “a lot of struggles with the resources we’ll have available to write the farm bill. We also have a political environment that will make it difficult to do a stand-alone bill.” So Reports David Bennett of Delta Farm Press, noting that Conaway said no new bill passes before the end of September, when the current one is set to expire, the current one will be extended “probably for a year.”

Bennett also notes that Rep. Bill Owens of New York said a "Farm Bill is not expected to pass this year because of the November election and typical pace of government in Washington," as reported by Denise Raymo of the Press Republican in Plattsburgh, N.Y. "Owens said both House Ag Committee Chair Frank Lucas and Senate Ag Committee Chair Collin Peterson have worked hard to bring the Farm Bill in as a logical spending plan, but it likely won't go anywhere this year."

Keith Good of the FarmPolicy blog notes a report from Carl Burnett Jr. of the Eagle-Gazette in Lancaster, Ohio: "Don't expect anything major to be decided in Congress before the November election. That's a message U.S. Rep. Steve Stivers presented to a group of farmers Thursday."