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NSAC’s Guide to the 2018 Farm Bill Conference Process

July 20, 2018


Photo: The US Capitol Building. Credit: USDA

The Capitol Building. Photo credit: USDA

As we barrel toward the expiration of the 2014 Farm Bill on September 30, both the House and Senate have now passed their respective versions of what they hope will become the next farm bill. The House passed its version on June 21 by a narrow and strictly partisan margin of 213-211. The Senate passed its version on June 28 by an overwhelming bipartisan vote of 86-11.

On many key issues related to food and agriculture, the House bill fails where the Senate bill succeeds. This is true for conservation, nutrition and food access, beginning farmers and farmers of color, local and regional food systems, value-added agriculture, rural development, and renewable energy, as well as when it comes to stemming consolidation and economic concentration in farm country.

On Wednesday, July 18, the House voted to form a farm bill Conference Committee, and the Senate selected their conferees shortly after. Click here for a complete list of farm bill conferees. Each member of the Conference Committee will have some influence over what goes into the final farm bill; however, the main drivers of the negotiations will be the chairs and ranking members of the Agriculture Committees.

There may be as few as two meetings of the full Conference Committee: one as early as this month to open discussions, and another to vote on the final conference report at the end of the process. The bulk of the decision-making will likely happen behind closed doors, as it did in the last farm bill process five years ago, and not through active meetings of the Conference Committee as was the norm previously.

Heading into conference, we compare how each of the two draft farm bills measures up on key priorities facing the sustainable food and agriculture community:

Reforming Commodity and Crop Insurance Programs

Unlike many titles of the farm bill, the House and Senate commodity title (Title I) and crop insurance title (Title XI) are not that different, with one primary exception – payment limitations and means testing (more below). The smaller differences include:

  • The House bill modestly increases spending on commodity supports while the Senate bill modestly decreases it.
  • The House bill increases spending for the Price Loss Coverage commodity subsidy, while decreasing it for Agriculture Risk Coverage commodity subsidy, while the Senate bill does the opposite.
  • Both bills have similar, but not identical, provisions for the dairy program.
  • The House bill cuts spending for the crop insurance title, but primarily by cutting risk management education and outreach programs, not by any changes to crop insurance subsidies. The Senate bill does not change overall spending in the crop insurance title, and leaves the education and outreach programs intact.

While the differences are not huge, they may still be the subjects of intense debate, especially in Title I and especially between regional commodity-based factions within the conference.

The big difference between the bills centers on rules for applying the annual, per-farm payment limitation that determines a farm’s subsidy payment amount and the adjusted gross income means test that determines payment eligibility.

By adding numerous new loopholes to payment limits, the House bill effectively guts payment limits in practice, allowing mega farms to collect millions of dollars a year in subsidies. An equally terrible, though transparent and honest approach, would have been striking payment limits from the law altogether.

The Senate bill, by very sharp contrast, includes the amendment brought by Senator Chuck Grassley (R-IA) that narrows existing loopholes, thereby improving enforceability and making the current nominal $250,000 annual payment limit the real payment limit.

The House bill also effectively guts the adjusted gross income (AGI) provision that has been part of the farm bill for many years to prevent millionaires from receiving commodity subsidies. AGI is a measure of net income, or gross income minus all farm and non-farm expenses and deductions. The Senate bill keeps current law intact and goes a step further by decreasing the nominal AGI limit from $900,000 a year to $700,000 a year. (Note: For many married couples, the actual income eligibility threshold can be two or three times higher than the nominal limit.)

It would not be at all surprising if the Title I payment limit and AGI provisions were among the very last issues that will be settled by the conferees.

On crop insurance, both bills keep current subsidy levels intact and neither bill does anything to put any limits on the amount of subsidy any one farm can receive or to make multi-millionaires have to pay more of their own insurance premium subsidies. There are nonetheless some important differences between the two bills. As we detail here, the House bill cuts important risk management education and outreach programs, while the Senate bill does not. And as we detail here, the Senate bill makes important advances for improving conservation outcomes of federal crop insurance and improving access to insurance for diversified farms and for beginning and socially disadvantaged farmers.

Program or Policy House Farm Bill Senate Farm Bill NSAC Ask
Commodity Program Reform Creates new loopholes to allow unlimited subsidies to the very wealthiest farms Strengthens means test, retains payment limits, and requires that recipients be actively engaged in farming Adopt Senate version
Conservation and Crop Insurance No changes Strengthens links between conservation and crop insurance; improves “Sodsaver” provisions for native grasslands Adopt Senate version
Crop Insurance Access Extends beginning farmer benefits to those farming less than 10 years (Whole Farm policies only) Includes study of barriers to accessing crop insurance for underserved producers; simplifies and strengthens Whole Farm Revenue Insurance; provides an on-ramp from non-insured disaster assistance to regular crop insurance Adopt House version of beginning farmer definition; adopt Senate version of remaining provisions
Risk Management Partnerships Program eliminated Reauthorized Adopt Senate version

Funding levels in the chart above are mandatory funding levels provided by the farm bill.

Conservation

The House and Senate bills differ dramatically in terms of overall conservation spending, conservation policy, and their approach to working lands conservation programs.

The House bill cuts total funding by nearly $1 billion over 10 years, moving that funding into other titles of the farm bill, while the Senate keeps overall conservation funding constant.

While both bills cut working lands conservation programs, the Senate bill stands in stark comparison to the House bill. The Senate bill retains all current farm bill conservation programs but reduces funding for the Environmental Quality Incentives Program and Conservation Stewardship Program by $2.5 billion over the next decade to free up money to increase funding for conservation easements and partnerships. The House bill, by contrast, would completely eliminate the nation’s largest, and only comprehensive, conservation program, the Conservation Stewardship Program (CSP), and cut overall working lands conservation funding by $5 billion. The House’s slash and burn approach would impact tens of thousands of farmers, ranchers, and forest owners across the country – indeed, more than 12,000 producers enrolled or re-enrolled in CSP in 2017 alone.

The House’s attempt to fold CSP into the Environmental Quality Incentives Program (EQIP) fails to retain the most important features of CSP, including a comprehensive, whole farm approach to conservation, an eligibility threshold based on conservation benefits for participation, and a clear reservation of dedicated funds for stewardship contracts.

Conversely, the Senate makes important policy improvements to working lands conservation programs. These include improved coordination between EQIP and CSP as well as additional payments and support for cover crops, diversified crop rotations, advanced grazing management, and comprehensive conservation planning. In order to protect both programs as well as advance critical policy reforms, NSAC urges conferees to use the Senate bill as the blueprint for an approach to working lands conservation.

In addition to the major differences in how both bills approach working lands conservation programs, they also contain several differences for land protection and partnership programs. While both bills increase the acreage cap for the Conservation Reserve Program (CRP) above the current 24 million acres, the House bill increases the cap to 29 million acres, and the Senate increases the cap to 25 million acres. Neither bill increases funding for CRP. Instead, reducing per-acre program benefits offsets the increase in acres.

NSAC is concerned about provisions in both bills that would negatively impact the continuous enrollment option for partial field enrollments including conservation buffers. We urge the conference committee to protect and enhance the continuous CRP enrollment in the final farm bill. We also urge the conferees to include provisions from the Senate bill to establish a Clean Lakes, Estuaries, and Rivers (CLEAR) initiative within the continuous CRP, and to create a permanent easement option for CLEAR and other continuous practices.

For the Agricultural Conservation Easement Program (ACEP) and the Regional Conservation Partnership Program (RCPP), the two bills include relatively equal funding levels, though differences in funding mechanisms and funding allocations for RCPP. We are disappointed that the House bill eliminates conservation plan requirements from ACEP, and urge the final bill to retain that critical component of agricultural land conservation, as is the case in the Senate bill.

The House bill includes an important provision to give USDA the authority and funding to measure, evaluate, and report on conservation program outcomes on a regular, iterative basis. This good government provision is not included in the Senate bill. We urge its inclusion in the final conference bill.

Outside of the conservation title, but with major implications for natural resource protection, the House bill includes several policy riders, many outside the committee’s jurisdiction, that threaten water quality, endangered species, forest health, and more. We hope the conference will follow the Senate’s lead in leaving extraneous fights over environmental laws out of the farm bill.

For more details on the differences between the two bills for NSAC’s conservation priorities, refer back to our original drilldown posts on the House and Senate conservation titles for specifics on what is contained within each bill.

Program or Policy House Farm Bill Senate Farm Bill NSAC Ask
Conservation Stewardship Program (CSP) Program eliminated Cuts $1 billion in funding over 10 years; includes policy improvements Include no cuts to CSP; adopt Senate policy improvements
Environmental Quality Incentives Program (EQIP) Increases funding at the expense of CSP Cuts $1.5 billion over 10 years Include no cuts to EQIP
Conservation Reserve Program Improves options for grassland protection; reduces assistance for partial-field practices Does not improve options for grassland protection; reduces assistance but includes new opportunities for water quality and wildlife protection Do not reduce assistance for partial-field practices; adopt House version of grasslands; adopt Senate version of new options for water quality and wildlife conservation
Agriculture Conservation Easement Program Includes problematic policy changes; $500 million per year Includes policy improvements; stair-step up to $450 million per year Adopt Senate version
CSP, EQIP Underserved Producer Set-asides and Advance Payment
No changes Set-asides for EQIP and CSP increased; makes advance payment automatic Adopt Senate version
Measurement of Conservation Outcomes Includes provision for USDA to measure, evaluate, and report on conservation program outcomes Not included Adopt House version

Funding levels in the chart above are mandatory funding levels provided by the farm bill.

Local and Regional Food & Rural Development

In terms of support for local and regional farm and food systems, the House and Senate farm bills are like night and day. While the bill passed by the House actively undermines the very programs and systems that have been the shining stars of the local and regional food renaissance, the Senate bill increases investments in these successful programs and also avoids the divisive changes to SNAP included in the House farm bill.

The House failed to incorporate a single provision from the bipartisan Local FARMS Act. The Senate bill goes in the opposite direction: rather than undermining long-standing and successful farm to fork programs, it builds on the foundation laid by previous farm bills and provides the tools and programs that will help to ensure local and regional food economies continue to grow and thrive – creating new opportunities for producers and rural communities.

As has been widely reported, the House bill includes drastic and highly controversial changes to the Supplemental Nutrition Assistance Program (SNAP) that will lead to increased hunger and inadequate nutrition for thousands of families and individuals in both rural and urban communities. On top of that, the House bill effectively eliminates key programs that support increased access to healthy, locally produced and organic foods – including the Farmers Market and Local Food Promotion Program (FMLFPP), Value-Added Producer Grants (VAPG), and National Organic Certification Cost Share Program (NOCCSP) – by not providing them with mandatory funding. On the positive side, both bills substantially increase mandatory funding for the Food Insecurity Nutrition Incentives Program and establish permanent baseline for the program.

On the rural development front, the House farm bill eliminates all mandatory funding and baseline for the Rural Energy for America Program, a cut of $500 million over 10 years, crippling the program. In addition to cutting REAP and providing no mandatory funding for VAPG, the bill fails to renew mandatory funding for the Rural Microentrepreneur Assistance Program (RMAP), which is the only USDA program focused specifically on increasing access to credit and business training for very small rural businesses.

The Senate bill creates the Local Agriculture Market Program (LAMP), combining and strengthening the functions of VAPG and FMLFPP and providing the consolidated program with permanent mandatory funding of $60 million per year. LAMP is almost identical to the Agricultural Market Development Program of the Local FARMS Act with the inclusion of cost-share assistance for producers to help with the expense of food safety practice upgrades and certification, similar to what was proposed as a stand-alone program in the Local FARMS Act.

In addition, the Senate bill requires USDA to have an Undersecretary for Rural Development, overturning a decision made last year by USDA Secretary Sonny Perdue to eliminate that position. The Senate bill also continues to invest in REAP and NOCCSP. Sadly, like the House bill, the Senate bill provides no mandatory funding for RMAP, a decision we hope will be rectified in conference. It also reduces mandatory funding for the Community Food Projects Grant program from $9 million to $5 million annually, whereas the House bill maintains funding for that program at $9 million annually, as we prefer.

Program or Policy House Farm Bill Senate Farm Bill NSAC Ask
Farmers Market & Local Food Promotion Program; Value- Added Producer Grants; Regional Food Economy Partnership Program; Food Safety Cost-share Assistance Mandatory funding eliminated $60 million per year combined (consolidates all programs into a new Local Agriculture Market Program) Adopt Senate version
National Organic Certification Cost-share Mandatory funding eliminated $11.5 million per year Adopt Senate version
Senior Farmers Market Nutrition Program $20.6 million per year $20.6 million per year Same
Harvesting Health – Produce Prescription Pilots Not included $4 million per year Adopt Senate version
Food Insecurity Incentives Program Stair-step up to $65 million per year $50 million per year Adopt House version
Community Food Projects Retains $9 million per year Reduces to $5 million per year Adopt House version
Rural Energy for America Mandatory funding eliminated Retains $50 million per year Adopt Senate version

Funding levels in the chart above are mandatory funding levels provided by the farm bill.

Beginning, Socially Disadvantaged, and Veteran Farmers

While support for the next generation of farmers and underserved producers is evident in both the House and Senate bills, on the whole, the Senate bill comes out on top as the clear winner.

In total, the Senate bill invests over a half a billion dollars over the next decade in programs that will permanently expand access to new farmer training, better connect retiring landowners with prospective new farmers, and scale up targeted outreach and technical assistance to farmers of color and military veterans.

The major issues that will be on the table during the upcoming conference negotiations will center around funding levels for three important programs that serve these communities: the Beginning Farmer and Rancher Development Program (BFRDP), the Outreach and Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers Program (2501), and the Conservation Reserve Program Transition Incentive Program (CRP-TIP).

All of these programs are funded at significantly higher levels in the Senate version, and two of these programs (BFRDP and 2501) are consolidated into a new program – Farming Outreach Training Opportunities Program (FOTO) – and given permanent baseline funding in the Senate bill. As with the case of LAMP (see above), this means that, under the Senate proposal, funding for these two programs wouldn’t run out after five years with the expiration of the next farm bill, but would rather be considered permanent. NSAC will be urging adoption of the Senate funding levels for all three of these programs in the final bill to ensure long-term support for the next generation.

Another significant difference between the two bills is the individual loan limits on Farm Service Agency (FSA) loans (see our previous post for a discussion of this debate). The House bill increases loan limits for guaranteed loans (those loans made by a private lender but guaranteed by USDA in case the farmer defaults), with no strings attached or oversight measures to ensure that an increase in the size of loans doesn’t negatively impact access to credit for beginning and socially disadvantaged farmers. The Senate took a similar but much more targeted approach. While also increasing loan limits for guaranteed loans (in addition to direct loans), they did so in a way that ensures a level of transparency, accountability and public reporting on lending trends – specifically related to target lending goals for beginning and socially disadvantaged farmers. NSAC will be supporting the Senate reporting requirements and increases to direct farm ownership loan caps during final negotiations over the farm bill, though we remain concerned about increases to loan caps for the other FSA loan programs.

There are many other beginning and socially disadvantaged farmer provisions that differ between the two bills in regard to crop insurance, conservation incentives, research, and data collection which are outlined in the chart below.

Program or Policy House Farm Bill Senate Farm Bill NSAC Ask
Conservation Reserve Program: Transition Incentives Program $33 million $50 million; includes policy improvements Adopt Senate version
Farm Service Agency loans Raises guaranteed loan cap to $1.75 million Raises guaranteed loan cap to $1.75 million, direct operating loan cap to $400,000, and direct farm ownership loan cap to $600,000; includes new transparency requirements Adopt House version of direct operating loans; adopt Senate version of direct farm ownership loans, but index to land inflation; adopt Senate version of transparency measures
Rural Microentrepreneur Assistance Program Mandatory funding eliminated Mandatory funding eliminated Provide $5 million annually in mandatory funding
Beginning Farmer and Rancher Development Program $20 million per year; includes policy improvements $25 million per year (part of new consolidated program with Section 2501); includes policy improvements Adopt Senate version
Outreach and Assistance to Socially Disadvantaged and Veteran Farmers and Ranchers (2501) Program $10 million per year; no policy improvements $25 million per year (part of new consolidated program); includes policy improvements Adopt Senate version
Other Includes new data initiative and research priorities on farmland transition; establishes beginning farmer coordinators Establishes beginning farmer coordinators; addresses heirs property issues for farmers of color Adopt all

Funding levels in the chart above are mandatory funding levels provided by the farm bill.

Agricultural Research

While both the House and Senate bills provide new investments in agricultural research, the Senate bill does more to address longstanding deficiencies in Research Title funding. While the House bill provides $250 million in new research, education, and extension funding over the next decade, the Senate bill nearly quadruples that investment and directs roughly a billion dollars of new federal grant funding into agricultural research, education, and extension.

The overall funding level for programs in the research title will be the single largest research-related issue up for debate during conference negotiations between the House and Senate bill. For example, while both bills increase funding for organic research through the Organic Agriculture Research and Extension Initiative (OREI), the increases included in the Senate bill go beyond those in the House bill. Part of the reason for the significantly higher price tag in the Senate is because the Senate bill makes the program permanent, which will ensure ongoing investments in organic research in the future.

Another significant difference is whether or not to reinvest farm bill funding in the newly established Foundation for Food and Agriculture. The Senate bill reinvests $200 million in this foundation, while the House provides no additional funding.

As discussed earlier, the Senate bill also increases and makes permanent support for BFRDP, but moves this education and extension program into the Miscellaneous Title, though it would continue to be administered by USDA’s research and extension agency.

Aside from overall funding issues, two other issues that will need to be negotiated during conference relate to seed breeding research and matching funds requirements for competitive grants. The Senate bill includes changes that begin to lay the groundwork for increased investments in plant breeding research, specifically in the development of local and regionally adapted varieties. The House is silent on these issues.

Program or Policy House Farm Bill Senate Farm Bill NSAC Ask
Organic Agriculture Research and Extension Initiative $30 million per year; new priority on soil health Stair-step up to $50 million per year and make permanent; new priority on soil health Adopt Senate version
Seeds and Breeds Not included Improvements to National Genetics Advisory Committee; requires assessment of seed banks Adopt Senate version
Sustainable Agriculture Research and Education Reauthorized Reauthorized Same
Matching funds requirement for competitive grant programs Eliminates or provides waiver for some programs Eliminates mandatory match requirements from 2014 and reinstates waivers Adopt Senate version

Funding levels in the chart above are mandatory funding levels provided by the farm bill.

Path Forward on the 2018 Farm Bill

We do not yet know when the Conference Committee will hold its first meeting, though House Agriculture Committee Chairman Mike Conaway (R-TX) has said that he would like to meet before August recess begins. Conferees will be negotiating with the goal of agreeing to a final package that can pass both the House and the Senate, a monumental task considering the politics around changes to SNAP. The Conference Committee will aim to finalize a final conference report with time left for the full Congress to vote on the bill before the expiration of the current farm bill on September 30.

If conferees are unable to meet that deadline, Congress will need to quickly pivot to passing a short-term extension of the 2014 Farm Bill. The most critical need, under that scenario, will be securing stopgap funding for 10 innovative programs that have no funding after September 30. This list includes many of the local food, rural development, beginning and socially disadvantaged farmer, organic, and research programs outlined above. Doing so would require a relatively small amount of money for a set of programs that have an enormous impact and would otherwise cease to operate.

Our hope, however, remains that the farm bill Conference Committee can agree to a family farm-friendly final bill with sufficient time to get it to the President’s desk before the end of the fiscal year. Stay tuned for more detail on farm bill negotiations in the coming weeks and months!

You can view NSAC’s 2018 Farm Bill Letter to Conferees here.


Categories: Beginning and Minority Farmers, Commodity, Crop Insurance & Credit Programs, Conservation, Energy & Environment, Farm Bill, Food Safety, Local & Regional Food Systems, Nutrition & Food Access, Organic, Research, Education & Extension, Rural Development


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