September 14, 2018
This month, we have been drawing attention to a set of programs that run out of funding at the end of this fiscal year, and that will cease to fund new projects and applicants if no new funding is provided. These “tiny but mighty” programs are some of the most innovative, far-reaching programs in the federal farm bill, and include technical and financial assistance for beginning and socially disadvantaged farmers and ranchers, local and regional food system development, healthy food access, rural development, agricultural research, organic farming, and more. The National Sustainable Agriculture Coalition (NSAC) is urging Congress to fund these programs as part of a full farm bill reauthorization, or, if a temporary extension of the current farm bill is necessary, as part of that extension.
Recently, however, increased attention has been given by some in Congress to simply allow the current farm bill to expire without bothering to pass a short-term farm bill extension. This discussion is happening because at this point, it does not appear that negotiations between the House and Senate on a new farm bill will reach a conclusion before the end of the month when the current farm bill expires.
While our preferred outcome absolutely continues to be a new farm bill, passed on-time with strong bipartisan support and based in large part on the bipartisan Senate-passed bill, we recognize that it is also important to consider the “what if” scenario of not meeting that deadline. We will continue to urge conferees to work to negotiate a deal that can be passed by Congress before the September 30 deadline.
This post answers the question of what happens if Congress simply lets the 2014 Farm Bill expire on September 30 without having passed a reauthorization or an extension. Our view on the matter is included at the end of the post, but in a nutshell, we believe that would be highly irresponsible and unfair to producers and the nation as a whole. But before explaining our view further, let’s first review what is and is not affected were the current farm bill be allowed to expire.
The largest farm bill programs – the Supplemental Nutrition Assistance Program (SNAP) and Federal Crop Insurance program – would continue on autopilot under an expiration scenario. SNAP is an “appropriated entitlement” and is funded each year based on need. As long as there is a new appropriations bill for FY 2019, or at least a Continuing Resolution carrying forward the provisions of the FY 2018 spending measure, all will be fine for SNAP. Crop Insurance has a permanent authorization and automatic funding stream through the farm bill, so will also be unaffected.
Commodity programs, such as Price Loss Coverage and Agriculture Risk Coverage, would also continue, for the short term. However, at the end of the calendar year, the U.S. Department of Agriculture (USDA) would be required to figure out how in the world it would implement highly problematic and anachronistic policy if there is not a new farm bill or an extension of the current bill by January. When a farm bill expires, commodity programs revert to the provisions of the so-called “permanent law,” meaning the commodity provisions of the 1949 and 1938 farm bills. Reverting to permanent law would at least theoretically require USDA to implement antiquated programs that would sharply raise commodity prices and food costs and are thus widely seen as the big incentive for Congress to complete each farm bill reauthorization on time.
That theory, however, is beginning to strain credulity. For the past five farm bill cycles, this incentive has not been enough to get bills done on schedule, though it at least helped secure farm bill extensions to provide the extra time needed to complete the full bill. The initial impact of permanent law would not be felt until early in the calendar year, and the full impact, if it ever were to happen, would not be felt for a year or more. While intended as a trigger to force Congress to act, it appears to have become less of a motivator than it once was.
As we’ve discussed in our What’s At Stake series, the tiny but mighty programs – basically all of the farm bill programs supporting value-added agriculture, organic agriculture, beginning farmers, farmers of color, and local and regional food systems – will no longer be able to fund new applications and proposals after September 30 if Congress does not provide new funding. A “clean” extension with no new money would not accomplish this. Under an expiration scenario where there is no reauthorization and no extension, these programs would cease to operate on October 1 – grants that had already been made and contracts that had already been signed before October 1 would be unaffected; however, USDA would have no authority to administer the programs.* As noted below, we believe, therefore, that a responsible farm bill extension would also be one that funds these programs on an interim basis while a final farm bill is being negotiated.
The FY 2018 Appropriations Act already extended the Environmental Quality Incentives Program (EQIP) through FY 2019, though USDA has indicated that only certain portions of EQIP will be offered due to farm bill uncertainty.
All of the other farm bill conservation programs – Conservation Reserve Program (CRP), Conservation Stewardship Program (CSP), and Agricultural Conservation Easement Program (ACEP), are only authorized to operate for fiscal years 2014 through 2018, and they would be trapped in a no-mans land where they have funding to proceed for 2019 sign-ups, but lack the legal authority to do so.
As a result, under the expiration scenario, there would be no sign-ups or further implementation of the programs until such time as Congress either agrees to a new farm bill or passes an extension of the current farm bill. If that happens right away, the agencies implementing the program can continue on without missing a beat. If, however, there is a short term or longer-term delay, the agencies will find it impossible to implement the programs in a timely fashion during 2019, with producers left holding the bag.
On top of the expiration of authority for conservation programs’ financial assistance, mandatory funding for technical assistance to support implementation of these programs would also expire, forcing NRCS to rely solely on discretionary funding and thus significantly hinder their ability to provide technical assistance. This disruption in conservation program sign-ups and implementation would be devastating for the farmers and ranchers who utilize and depend on this assistance. It would also place enormous strain on USDA when they are ultimately asked to implement the programs without sufficient time to do the job.
The Specialty Crop Block Grant program is another example of a program with permanent mandatory farm bill funding, yet no authority to implement the program beyond the expiration of the current farm bill. Hence it too would be trapped in limbo, with no legal authority for USDA to proceed with the FY 2019 funding cycle. Another example is the Seniors Farmers Market Nutrition Program – it has permanent funding, but USDA would have to cease delivering the program if there is not a farm bill extension.
In the midst of an ongoing trade war, it would be particularly harmful if the farm bill’s trade title’s Foreign Market Development Program and Market Access programs were allowed to expire, which would also be the case if there is not a final farm bill or a farm bill extension by September 30. Also at stake is the Food for Peace international food aid programs. Without new or continued farm bill authority, USDA would be unable to provide financing for food aid.
If Congress is unable to meet the September 30 farm bill deadline, we believe it would be grossly irresponsible for Congress to skip town for the election season without passing a short-term farm bill extension. Congress should care first and foremost about farmers and other stakeholders using these important programs, and should cast aside their prejudices about what may or may not work best for them as legislative dealmakers. Putting so many programs on hold, simply to ratchet up pressure to get a farm bill done would be sad commentary indeed on congressional dysfunction.
Our view is that if a deal is indeed out of reach before the September 30 deadline, Congress should pass a short term extension and come back after Election Day and roll up their sleeves and get the new farm bill finished, based on the outline of an acceptable bipartisan compromise as embodied in the Senate farm bill that passed by an overwhelming 86-11 vote in the upper body. Moreover, we believe that any short-term or long-term farm bill extension must include funding, for at least the period of the extension, for the tiny but mighty programs that lack permanent farm bill baseline and that would otherwise lose their farm bill funding unless and until a new farm bill is signed into law.
*Note: there are some programs that receive both mandatory funding through the farm bill and discretionary funding through the annual appropriations process. This includes the Value-Added Program Grants, Organic Data Initiative, and Section 2501 Program. Those programs could continue, with far less total funding, using only their appropriated dollars.