Time is running out to pass a new farm bill, with efforts already a year behind schedule. A new analysis conducted by the American Farm Bureau Federation (AFBF) reviewed the potential consequences if Congress fails to pass a modernized farm bill.
The farm bill is intended to be reviewed and modernized every five years. The last farm bill expired in September 2023, leaving Congress with a one-year extension to update policy that is now 6 years old. Much has happened since 2018, including a worldwide pandemic, numerous “black swan” events in the marketplace and geopolitical conflicts.
The Market Intel analysis, conducted by AFBF economists Roger Cryan and Betty Resnick, considered five of the biggest implications of failing to pass a new farm bill: weakened farmer safety nets, less funding for sustainability efforts, gaps in dairy farmer coverage, decreased U.S. involvement in agricultural research, and reduced economic and national security.
“If Congress fails to pass a new and improved farm bill, they will be responsible for leaving farmers in a lurch at a time when we’ve lost more than 140,000 family farms in just five years,” said AFBF President Zippy Duvall. “Congress must not put farmers, ranchers and America’s families on the back burner.”
Farmer safety nets
Safety net programs through the USDA help keep farmers in production through the bad years. A key safety net program is the crop insurance program, which wouldn’t go away without a new farm bill, but improvements are needed to make it affordable, the report said. Reference prices are a key determinant for payments in programs such as Agriculture Risk Coverage and Price Loss Coverage but were set in 2014.
“The inflation of the last few years has raised costs and market prices but left this safety net so close to the ground that it provides little or no protection for many farmers,” the economists wrote. Adjusting the reference prices or their formulas is necessary to make the programs do what they were intended to do.
Dairy farmer assistance
The Dairy Margin Coverage program assists dairy producers when the markets are tough. The average dairy farm produced 5 million pounds of milk in 2018, whereas the number is closer to more than 8 million pounds today. Farmers hope to increase the amount of a farm’s annual production that gets extra risk coverage to a level closer to today’s production, the report said.
USDA recently proposed giving a large share of the value of milk priced in the federal milk marketing orders to processors, the report cited, which would reduce farm milk prices by about 5%. Farms are relying on the farm bill to direct USDA to conduct an audited and mandatory survey of milk processing costs to ensure fairness in milk price formulas.
“By delaying the farm bill another year, Congress would be delaying help that could slow the rate of dairy farm consolidation,” the report authors wrote.
Sustainability
Sustainability expectations have increased for farmers and ranchers. The Inflation Reduction Act allocated funds to conservation programs aimed at helping farmers and ranchers, but for a limited time period. There is an opportunity to incorporate those funds into a new farm bill and make it part of Congress’ permanent baseline for future farm bills, the report said.
Conservation programs are defined by a fixed amount of money, which does not account for inflation, similar to the safety net programs.
“Getting a farm bill passed is the simplest, and maybe the only way, to convert the one-time limited spending for sustainable agriculture into a long-term commitment,” the economists said.
Ag research
A lot of research is being conducted in the private sector, but much work depends on publicly funded research, the report said. The U.S. has been falling behind other countries’ public investments into agricultural research. China spends twice as much as the U.S. does annually on ag research, more than $50 billion a year.
Supporting the productivity of U.S. agriculture is critical to our competitiveness in the global markets and necessary to support the health and nutrition of the world, the report said.
Economic, national security
The economic success of agriculture supports our nation’s economy. “When farms go out of business, rural and small-town economies feel the pinch as the multiplied impact of the farm business is lost to hardware stores, feed stores, implement dealerships and all the businesses that serve the people who support the farmer,” the report authors said.
The farm bill also supports the general public through assistance programs like the Supplemental Nutrition Assistance Program and The Emergency Food Assistance Program.
Extending the 2018 Farm Bill for another year would have us operating under a 7-year-old plan in a time very different from 2018. Reference prices would be outdated for another year and less effective from inflation. Research in agriculture would be stagnant. Conservation funding dollars would be lost. All of this would contribute to a loss in national security.
“These are the stakes,” the report concluded. “The House Agriculture Committee took the first step. Will the Senate Agriculture Committee follow?”
More than 500 industry organizations penned a letter to Congress on July 22, urging lawmakers to pass a bipartisan farm bill. “As committed stakeholders and beneficiaries of the farm bill, we cannot continue to wait for updated policies, provisions, initiatives and critical funding that support our collective interests,” the groups wrote. — Anna Miller, WLJ managing editor
