Getting the 2018 Farm Bill signed was a big accomplishment. The $867 billion program has been over a year in the making and includes many expanded safety-net programs for US farmers. It did not include changes to the Supplemental Nutrition Assistance Program (SNAP) that President Trump had initially hoped for, and overall nothing in the bill was particularly revolutionary. But, there was some progress. What are some of the most relevant changes? Here’s our collection of all things Farm Bill.
Amie Simpson of Brownfield Ag News reported on the signing of the 2018 Farm Bill into law by President Trump on December 20. Simpson quotes President Trump from a news conference that day, saying he called the bill a victory for US farmers and ranchers.
“With the passage of the farm bill, we are delivering to the farmers and ranchers who are the heart and soul of America,” he says. “We are ensuring that American agriculture will always feed our families, nourish our communities, power our commerce, and inspire our nation.”
US Ag Secretary Sonny Perdue said that the bill gives farmers some certainty before the beginning of the growing season.
“Going forward the can make their plans in 2019 and make their lenders and bankers proud of what they can plan for,” he says “The underpinning of the safety net of crop insurance is a big deal for agriculture, it’s a big deal for the U.S. economy, the Ag economy, for food security, and national security.”
Below is a run-through of significant changes and updates to the bill.
Legalized Hemp Production
Willie Vogt of American Agriculturalist notes that the new Farm Bill makes hemp production legal- as long as the psychoactive delta-9-tetrahydrocannabinol (THC) is below 0.3% on a dry weight basis. Eric Steenstra, the President of Vote Hemp says the passage of the Farm Bill was,
“A momentous victory for the movement in support of hemp farming, and will have far-reaching positive impacts on rural economies and farming communities, increase availability of sustainable products for American consumers, and create new businesses and jobs in the hemp industry.”
Hemp can be grown to make just about anything from clothing, to rope, to Legos. However, it’s important to note that Congress left in place the FDA’s legal authority to regulate products containing cannabis or cannabis-derived compounds. The bill did not legalize marijuana.
The Farm Bill includes a provision called the Precision Agriculture Connectivity Act. As farmers are utilizing more data-driven technologies on their farms, reliable broadband internet is critical in order for them to take full advantage of the efficiency improvements and other data-driven solutions that are now available to them. More infrastructure will be going in.
FMD Vaccine Bank
Jennifer Shike of Pork Business say that the Farm Bill will allow the USDA to use $150 million over the next five years for an FMD vaccine bank, for the National Animal Health Laboratory Network (NAHLN), and for state efforts to prepare for a foreign animal disease outbreak. Pig farmers are generally pleased, and see this as a step forward in protecting the US pig heard.
The Farm Bill also supports international promotion of US agricultural products through the continued funding of the USDA Market Access Program and the USDA Foreign Market Development Program. Gregg Hora, the president of the Iowa Pork Producers Association says,
“The farm bill helps farmers improve their opportunities in producing food; and while U.S. pig farmers already do a good job there, we now need the export markets to receive that food,” Hora says. “We’re asking the administration to resolve its dispute with China and to drop the U.S. tariff on steel and aluminum imports from Mexico, so Mexico will rescind its duty on U.S. pork.”
ARC and PLC
Chuck Abbott of Successful Farming shared “10 Things to Know About the 2018 Farm Bill,” and changes to the ARC and PLC made up 4 of 10 on his list. Here is what’s ahead for the ARC and PLC.
Starting in 2021 farmers will be able to make an annual decision between Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). Farmers will be required to make a decision for 2019 and 2020 together.
PLC prices could go up if commodity prices go up. The new Farm Bill includes an escalator provision that will increase PLC reference prices if there’s a sustained increase in commodity prices. For the nationwide average price of a crop during any marketing year, increases are calculated at 85% of the five-year Olympic average.
PLC program yields can go up. Farmers will have one opportunity to update their program yields using the following:
Using a formula that starts at 90% of the average yield for crops from 2013-2017 and reduces it by a ratio that compares the 2013-2017 national average yields with the average for 2008-2012 crops. The result is a yield update factor “indicating how much of the initial 90%…a farmer can claim in the update,” says a team of university economists, who estimated an update factor of 1 for wheat and 0.81 for corn and soybeans.
The ARC will also be improved. The USDA will use a yield plug of 80% of the transitional yield to calculate a trend adjusted yield for use in base calculations. The Farm Bill also states that the USDA should take into consideration the trend-adjusted yield factor used by the crop insurance system so the numbers are more likely to match up.
Marketing Loan Rates Increase
For the first time in almost twenty years, loan rates will rise by 13-24% for grains and soybeans. The new per bushel rates are as follows:
- Corn- $2.20
- Soybeans- $6.20
- Wheat- $3.38
- Sorghum- $2.20
- Barley- $2.50
- Oats- $2
More Family Members Can Get Farm Subsidies
Terri Queck-Matzie of Successful Farming says the new bill doesn’t have a means test and extended family members are now eligible to collect farm subsidies. It’s possible to have more than one payee per farm, and you don’t necessarily have to even work on the farm premises to receive benefits. Iowa Senator Charles Grassley has long been against farm subsidies like this. He refused to sign off on the bill unless it contained caps on farm subsidies.
“What we’re doing is subsidizing the bigger farmers to get bigger and making it harder for the young farmer to get started,” Grassley said, “when we should be protecting the small and mid-sized guy.”
Grassley was on the Senate Ag Committee and was one of 13 other Senators that didn’t sign the bill. Last fall he wrote a letter to the Ag Committee saying,
“Current law allows for most farmers who organize their farms as general partnerships or joint ventures to designate an unlimited number of farm managers for the purposes of collecting additional farm subsidies. The impact of this loophole is that large farms crowd out young and beginning farmers by increasing the price of land and cash rent. The fact that few young people are starting farms and staying in rural America is not surprising considering they have to compete with established farmers who have millions in equity and access to unlimited farm subsidies.”
He’s not wrong. According to USDA numbers, 77% of commodity subsidies go to farms in the top 10% of sales. In addition, over half of US farmland is rented, and the Farm Bill subsidies typically benefit landowners more than renters.
Chuck Abbott of Successful Farming reports that the maximum enrollment for CRP will increase from 24 to 27 million acres. Two million acres are reserved for grassland. For the continuous enrollment option, payment rates are 90% of the average county rental rate for land and 85% of the average county rate for general enrollments.
CSP and EQIP
The Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) are now combined in an effort to streamline paperwork and coordinate conservation efforts. EQIP will receive $2 billion in funding to be used for livestock. Irrigation districts are now eligible for EQIP. CSP on the other hand, will now operate under a dollar limit that rises each subsequent year. CSP will oversee a new Grassland Conservation Initiative that pays $18/acre/year. The Regional Conservation Partnership Program is getting $300 million to leverage private investments for conservation projects in watersheds or landscapes.
The Farm Bill clarifies cover crops as good farming practice for insurance purposes. Farmers should no longer have to worry that cover cropping will put their crop insurance at risk.
The Next Step
Now that the Farm Bill has passed, Gene Lucht of Ag Update writes that it’s up to the USDA to go through the regulations, train local and state Ag officials, and then get the programs going.
Jaqui Fatka of Farm Futures says that US Ag Secretary Sonny Perdue promised to implement it as Congress intended.
“All told, this is a farm bill that should be welcomed by producers, and at USDA we will eagerly implement its provisions.”
House Agriculture Committee ranking member Collin Peterson of Minnesota will likely be the one making sure that it happens, as he will likely be the committee chairmen in 2019. This is familiar territory for him, as he had a similar role after the passing of the 2008 Farm Bill. He said,
“I look forward to working with USDA in the coming Congress to ensure these programs are implemented as quickly as possible and to their full effectiveness.”
Passed just in the nick of time, there’s a lot to the 2018 Farm Bill. Some programs are well known, others new. The CSP and EQIP are now combined. CRP is expanding slightly and more family members are eligible for farm subsidies. Marketing loan rates are increasing for the first time in nearly 20 years. Changes to the ARC and PLC are complicated. Pork producers are pleased with funding for the FMD vaccine bank, and there’s continued trade support and increased funding for rural broadband. Hemp production is now legal. Of course, there’s so much more, but we’ve deemed these to be some of the most relevant changes. Generally, it appears that passage of the 2018 Farm Bill has been a welcome relief for most in US Agriculture.
Read our additional coverage on the 2018 Farm Bill here: