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Senate Agriculture Committee Tackles Farm Bill Heavy Hitters: Commodities, Credit, and Crop Insurance

July 26, 2017

Senate Agriculture Committee Chairman Pat Roberts (R-KS) and Debbie Stabenow (D-MI). Photo credit: Agri-Pulse.

Yesterday, Senate Agriculture Committee hunkered down for an epic farm bill hearing, during which 17 witnesses gave testimony on three of the bill’s most significant titles – the Commodity Title (Title I), Credit Title (Title V), and Risk Management Title (Title XI).

Witnesses at the hearing included representatives from commodity groups, banks, general farm organizations, and the crop insurance industry, as well as the National Young Farmers Coalition (NYFC), a member of the National Sustainable Agriculture Coalition (NSAC). NYFC’s Executive Director and Co-Founder Lindsey Lusher Schute focused her testimony on the challenges faced by young and beginning farmers, and how Congress could work to overcome them in the 2018 Farm Bill (e.g., by improving access to affordable farmland, credit, and Farm Service Agency programs).

“Farming is a career that’s easy to love,” Shute told the Committee, “but to recruit the next generation of farmers, it must also provide a decent living.”

With 17 different witnesses, the testimony given was varied and nuanced. However, there were several areas of consensus that will be particularly important to sustainable agriculture in the next farm bill.

Points of Consensus

In addition to agreeing that the farm safety net is critical and that funding for farm bill programs should be protected, several areas of consensus emerged during the roughly four-hour long hearing:

  • Whole-Farm Revenue Protection Insurance (WFRP): Several witnesses highlighted for the Committee the important role WFRP has played in expanding access to insurance for diversified, specialty crop, organic, and underserved farmers. NSAC has been a champion of WFRP from its conception, and has provided several recommendations on how the program can continue to improve and expand access to beginning farmers.
  • Improve land and farm transfer opportunities: The average age of our nation’s farmers and ranchers is steadily increasing; sadly, in many cases of farmer retirement, no plans have been made to transfer the farm or farmland to a next generation producer. Several Senators and witnesses at yesterday’s hearing spoke about the need for the farm bill to better support beginning farmers and retiring farmers who are interested in keeping their land in production. Highlighted programs and policy options included: the Beginning Farmer and Rancher Development Program, changing the tax code to incentivize land transition to farmers, and protecting and strengthening Farm Service Agency (FSA) loan programs so they better meet the needs of the new farmers.
  • Working lands conservation programs: There was broad support for working lands conservation programs across the two panels of commodity group representatives. These programs, like the Conservation Stewardship Program (CSP), Environmental Quality Incentives Program (EQIP), and Regional Conservation Partnership Program (RCPP) help farmers across the country to implement conservation practices on millions of acres of farmland to improve water quality, soil health, and other resources.
  • Commodity subsidy payments: Panelists largely agreed that these payments should be based on historic planted acreage, and not on current plantings. This issue has been a source of constant debate over many farm bills, but there now seems to be agreement that subsidy payments for the Agriculture Risk Coverage and Price Loss Coverage programs (if continued) should be based on a historical plantings. This is important because basing payments on historical plantings removes the incentive to “plant to the program” (i.e., to plant whatever crop will get you the biggest payment that year). Planting to the program can cause serious weed, disease, and resource depletion issues by encouraging mono-cropping and discouraging rotation of crops.
  • FSA Loan programs: In most cases, FSA is the lender of last resort and the lender of first opportunity for American farmers and ranchers. FSA’s primary loan programs represent less than 10 percent of total industry lending, but they are critically important for their outsized roll in serving beginning farmers, socially disadvantaged farmers, and other farmers that are unable to obtain credit in the private market. Farmers’ reliance on these loans has grown in the last few years as commodity prices have remained low, and banks have reduced their share of lending.

Actively Engaged in Farming

Senator Chuck Grassley (R-IA) spoke at length about the continued need to clamp down on commodity subsidy loopholes that have been left open for decades. Payment limitation loopholes in commodity programs have effectively led to subsidy payments being made to non-farmers, a fact that has infuriated the Iowa Senator.

“Perhaps the most important thing I can do is explain why this issue is so important,” Grassley said. “Giving non-farmers subsidies is completely indefensible, especially when we have a $20 trillion debt. If bigger farmers are as efficient as they claim, they should not need unlimited subsidies to make their business model work.”

During the 2014 Farm Bill debates, a provision was approved in both the House and Senate that would have addressed the Senator’s concerns by preventing anyone not actively engaged in farming form receiving subsidy payments. However, the rule was secretly dropped in final negotiations and instead swapped for a loosely written rule that exempts all family farms (no matter how large) from the limit and allows partnerships and joint ventures a potential limit of over $1 million per year.

Unlimited subsidies weaken the taxpayer’s faith in farmer support programs, make it increasingly difficult for beginning farmers access to land by giving the largest farms excess funds with which to buy up property, and distort agricultural markets by disproportionately supporting the wealthiest commodity farms.

The Home Stretch?

The Senate Agriculture Committee has now held hearings on eight of the twelve titles usually contained in the farm bill. During yesterday’s hearing, Senate Agriculture Committee Chairman Pat Roberts (R-KS) asked Senate Majority Leader Mitch McConnell (R-KY) about providing floor time for the farm bill later this year. “The sooner the better,” McConnell replied. While we appreciate that the Senate Agriculture Committee, like its counterpart in the House, is moving quickly to debate policies and get its ducks in a row, the 2017 target may be somewhat aspirational – very rarely has a farm bill been completed before the expiration of the previous farm bill (the current bill expires September 30, 2018).

NSAC will continue to be actively engaged in future farm bill hearings and is currently preparing our 2018 Farm Bill Platform. Stay tuned to our website for ongoing updates and analysis.

Categories: Beginning and Minority Farmers, Commodity, Crop Insurance & Credit Programs, Conservation, Energy & Environment, Farm Bill

One response to “Senate Agriculture Committee Tackles Farm Bill Heavy Hitters: Commodities, Credit, and Crop Insurance”

  1. Pat Cantwell says:

    Subsidies by themselves are unhealthy. Giving non-farmers subsidies is beyond unhealthy. It is immoral government.