Farm Policy Outlook Delayed

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) — The last two weeks in Congress highlight the improbability of getting a farm bill done on time.

Regardless of whether the lights remain on at federal agencies after Friday, Congress and the White House will be battling over a bill to fund the federal government and just how far to go with any possible immigration legislation. The Children’s Health Insurance Program (CHIP) and the youth tied up in the Deferred Action for Childhood Arrivals (DACA) have been the major points of contention over Fiscal Year 2018, which began Oct. 1.

Disaster aid, the farm bill and other possible agenda items are stalled until the latest budget standoff is resolved. Sen. Jerry Moran, R-Kansas, spoke on the U.S. Senate floor on Thursday, pointing out that the budget fights end up delaying every other plan for Congress.

"May and June will be occupied by the things we should have resolved now," Moran said. "And in May and June, we will be taking care of the things we could have been doing today."

With tax reform in the bag, the Republican-led Congress was two bills away from a legislative hat trick for agriculture. Congress would need to get a farm bill done and a comprehensive immigration-reform bill that includes overhauling the agricultural guest-worker program to reach the trifecta. The last time Congress passed a farm bill, immigration reform and a farm bill in the same two-year cycle was 1985-86.

Moran must have had some foresight on the budget fight and possible shutdown because he told members of the American Farm Bureau Federation nearly two weeks ago in Nashville not to expect a farm bill soon.

"Certainly it seems the House is further along than the Senate, but having said that, neither one is in a position to get something done immediately," Moran said. He added. "We’re going to be bogged down with the appropriations process, and in an agricultural sense, we’ve got to deal with disaster assistance before we get to a farm bill. And actually, dealing with the disaster assistance will help create an additional base for agricultural spending in the farm bill."

As Congress fights over temporary funding measures, the farm bill gets further hung up because of the fate of an $18 billion disaster package for the hurricanes, wildfires and other disasters last year. The disaster bill contains about $2.6 billion in agricultural disaster aid. That includes specific provisions to help cotton and dairy farmers. The bill would allow cotton farmers to sign up for Price Loss Coverage for their cottonseed and change the formula for the dairy Margin Protection Program. The disaster bill was passed by the House in December, but still needs some Senate action.

Jonathan Coppess, a former USDA Farm Service Agency administrator under the Obama Administration, said there are a lot of questions about whether Congress can complete a complex piece of legislation such as farm bill this calendar year. Another continuing resolution until mid-February backs up the calendar for lawmakers.

"You have got the asks for the farm bill and you have got the baseline juggling act, but so much of that hinges on cotton and dairy," Coppess said. "I think everyone is waiting to see what happens with the disaster bill."

Farm groups have called for doubling funds for trade promotion, and livestock groups want to build a national vaccine bank for major protein animals. Commodity groups want to make changes to the Agricultural Risk Coverage while conservatives are pushing to make changes to food-aid programs. Then there is an unfinished question about what direction to take Conservation Reserve Program acres and rental rates. It’s expected there will be several proposals to change CRP, including the idea of contracting farmers to grow cover crops on working land after the cash crop is harvested.

Coppess has been watching the build-up to the next farm bill as an assistant professor at the University of Illinois-Urbana. He notes the last farm bill involved questions about changing policies, specifically the shift away from Direct Payments to the Agricultural Risk Program and Price Loss Program.

"Now you are overwhelmed by this incredible production and low-price scenario, and then there are the worries about NAFTA," Coppess said. "There’s just a real strong concern about how to manage through not just the price situation, but the uncertainty."

Farmers are watching as the Trump Administration continues to renegotiate the North American Free Trade Agreement with Canada and Mexico. Meanwhile, the Trump Administration has not been successful in jumpstarting any new trade deals.

All of the various political pitfalls have turned National Farmers Union President Roger Johnson more skeptical over whether a farm bill can be done on time, which is at the end of September.

"For most of the past year, I’ve been arguing the chances of getting a farm bill done on time are pretty high," Johnson said. "As the year came to a close, I’ve been less and less of that view. The debate around the tax bill, and the huge hole in the deficit that brings, are going to make it more difficult to get a farm bill done on time."

Talking about the need to get a farm bill completed in 2018, Johnson noted farm income is roughly 50% of what it was four years ago. "There is a lot of pain out there," he said. "This Congress needs to get a farm bill done on time. If it doesn’t, that’s an enormous problem for farmers."

Johnson also questioned what happens to farmers if the farm bill is late. Will farmers get the chance to shift from one farm program to another? The low formula guarantees under ARC suggest large percentages of corn and soybean farmers will want to shift farms to PLC.

"If farmers don’t have a chance to re-elect, you are going to have a bunch of farmers who signed up for ARC who are going to have a major problem on their hands if they don’t get a chance to re-enroll," Johnson said. "Most of them are going to take PLC. There’s no question about that."

Johnson also expects to continue highlighting the policy problems in rural America dealing with the opioid crisis. He and American Farm Bureau President Zippy Duvall have joined to shine a spotlight on the crisis.

"Some of the statistics are just really startling," Johnson said. "Almost every year it is just doubling in size. If you tie that together with the economic stress farmers are facing … it’s just an explosive situation."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(ES/BAS)