Author: Bart Fischer

The U.S. House of Representatives departed Washington, DC, for the August recess last week, and the Senate is currently wrapping up its business. When Congress returns in September, most of the legislative agenda prior to the Presidential election will be focused on funding the government past September 30, 2024. This naturally raises the question: will we see a new farm bill this year?

We can look to the past 10 farm bills (over the course of the last 50 years) for guidance. As noted in Table 1, only 2 of the last 10 farm bills were enacted during presidential election years (1996 and 2008 Farm Bills), and both of those were signed into law before Congress left town for the August recess. The remaining 8 farm bills were enacted in the Congress following the Presidential election, with 2 of those (1990 and 2018 Farm Bills) coming in the lame duck session following the midterm elections.

Table 1. Enactment of the Past 10 Farm Bills

Enacted during a…	Farm Bill (Month Enacted)
Year Following Presidential Election:	1996 Farm Bill (April) 2008 Farm Bill (June)
Year Following Presidential Election:	1973 Farm Bill (August) 1977 Farm Bill (September) 1981 Farm Bill (December) 1985 Farm Bill (December)
Midterm Election Year:	1990 Farm Bill (November*) 2002 Farm Bill (May) 2014 Farm Bill (February) 2018 Farm Bill (December*)
Year Following Midterm Election:	None

While history does not bode well for wrapping up a farm bill this year (i.e., none of the last 10 farm bills were completed immediately prior to or following a presidential election), it’s not out of the realm of possibility. So, what would it take to get it wrapped up? Following are the key issues holding up completion: 

• Improving the farm safety net. As we’ve said for the last two years – and there seems to be growing agreement on this point – there is no point in doing a farm bill absent improvements to the farm safety net, namely improving the Reference Prices in the Price Loss Coverage (PLC) program and the loss thresholds in the Agriculture Risk Coverage (ARC) program. With that said, there is still disagreement on the extent of the improvements and how to pay for them.

• Commodity Credit Corporation (CCC). Discretionary use of the CCC has long been a sticking point for lawmakers, but that concern has grown dramatically over the course of the last two Administrations, where the CCC has been used to deliver tens of billions in aid to agricultural producers and, more recently, climate-smart programming. Many in Congress would like to restrict the Secretary’s use of the CCC, returning decisions about funding to Congress. Doing so would save money that could be used to offset improvements to the farm safety net. While we discussed CCC funding in detail last Fall, the Congressional Budget Office (CBO) will officially weigh in on this topic tomorrow when they release the cost estimate for the House Agriculture Committee-passed farm bill. 

• Inflation Reduction Act (IRA). While there seems to be growing consensus over bringing the IRA conservation funding inside of the farm bill, there are ongoing disagreements about whether that funding should continue to be restricted to climate-smart practices. Some lawmakers would like to put those decisions – like most other conservation decisions – in the hands of local decisionmakers.

• Thrifty Food Plan (TFP). There is still considerable frustration among most Republican lawmakers over the Biden Administration’s roughly $250 billion unilateral increase to the Supplemental Nutrition Assistance Program (SNAP) via adjustments to the TFP in 2021. Similar to the discussion on the CCC, many lawmakers would like to return decisions about future increases in SNAP spending to Congress.

While there are certainly disagreements, in our view, the list above is by no means insurmountable. While there is very little legislative runway prior to the election, we do think it’s possible to wrap up the farm bill during the lame duck session, perhaps as part of a supplemental. Why?

A recent hearing before the House Agriculture Committee highlighted the mounting concerns about financial conditions in the countryside. With sustained high input costs and prices that continue to collapse, growers are facing a precarious situation as they plan for the 2025 crop year. That dynamic – coupled with natural disasters like the wildfires in the Texas panhandle – are triggering alarm bells and resulting in calls for additional disaster assistance.

Congress has a lot on its plate going into a new Congress. For example, the debt limit – which dominated much of the conversation in the first half of the current Congress – is currently suspended through January 1, 2025. In addition, several major provisions from the Tax Cuts and Jobs Act of 2017 – including several that are important to the agricultural community – are set to expire at the end of next year. Rather than punting the farm bill into the new Congress and relying on another year of disaster assistance, Congress could choose to reauthorize the farm bill in the lame duck session – improving the farm safety net and side-stepping the need for disaster assistance – all the while keeping the farm bill out of what will already be a very crowded legislative calendar in 2025.

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Fischer, Bart L., and Joe Outlaw. “Will We See a New Farm Bill This Year?” Southern Ag Today 4(31.4). August 1, 2024. Permalink

On May 30, 2024, we compared the farm safety net features of the House Ag Committee-passed version of the 2024 Farm Bill (Farm, Food, and National Security Act of 2024) with the Senate majority proposal (Rural Prosperity and Food Security Act of 2024). In today’s article, we focus on one of those provisions: the addition of base acres. While the Senate majority proposal would provide a “limited opportunity” to update base for “underserved producers”– and it remains to be seen exactly what that would entail – the House Ag Committee-passed bill would add up to an additional 30 million acres of base for farms where planted acres exceed base acres on the farm. While base is a wonky, often overlooked provision, is has the potential to be one of the more consequential in the farm bill, particularly as proposed by the House. 

Previous Southern Ag Today articles (for example, see here) have explored the issue of base. While a seemingly straightforward issue, it’s actually quite complicated. First, base acres were established decades ago and there have been very few opportunities to update/add base. Second, because base acres are decoupled from planting history, what a producer was planting in the mid-1980s when base was established is not necessarily reflective of what is being planted on the farm today. Third, while the 2014 Farm Bill allowed for a “reallocation” of base acres – which did provide an opportunity for the base acres to be more aligned with what was planted on the farm, on average, from 2009-2013 – that “reallocation” did not allow new base acres to be added to the farm. In fact, the last real opportunity to add base acres occurred in the 2002 Farm Bill as soybeans were being added as a covered commodity. Consequently, land with no base (or with plantings that exceed base) have had virtually no opportunity to add base in the last several decades. Fourth, there are severe data limitations preventing thorough analysis, which means it’s difficult for policymakers to know the scope of the problem. Fifth, because of those data limitations, it’s difficult to advise policymakers on the implications of various proposals to change base acres. For example, one popular option adopted by the National Corn Growers Association would be for Congress to simply mandate a base acre update to recent plantings, but ascertaining who would add/lose base is almost impossible to determine, which puts Congress in a precarious position. Despite all of these challenges, based on our collective decades of experience in working on farm policy, just about every farmer we know has land without base (or that is “under-based”) and would be very interested in being able to add new base acres. 

It is this last point that makes the House Ag Committee proposal particularly intriguing. It is entirely optional and, apart from the 2002 Farm Bill making soybeans a covered commodity, it would represent the single largest opportunity to add base acres since their initial creation in the mid-1980s. Under the House Ag Committee proposal, a farm would be eligible for additional base acres equal to the amount by which (1) the average number of acres from 2019 through 2023 that were planted or prevented from being planted to covered commodities (including “eligible non-covered commodities”) exceeds (2) the existing base acres on the farm. In other words, if you have a farm with plantings that exceed base (including farms where you have no base at all), you can add the missing base. There are a few key limitations/provisions of which to be mindful:

• To avoid penalizing producers who may be in a crop rotation that contains certain non-covered commodities, the number of eligible acres may include the number of acres planted or prevented from being planted to non-covered commodities (i.e., the “eligible non-covered commodities” referenced above) other than trees, bushes, vines, and pasture. The acres of non-covered commodities that can count toward the eligible acres on the farm would be limited and may not exceed 15% of the total acres on the farm.

• New base acres added under this provision would be assigned to covered commodities using a formula like that utilized for the base reallocation opportunity in the 2014 Farm Bill. The assignment would reflect the ratio of covered commodities planted on the farm from 2019 through 2023.

• Following sign-up, if the total number of eligible acres across the country exceeds 30 million acres, the Secretary would be required to apply a pro-rata reduction to all farms to reduce the number of eligible acres to equal 30 million. For example, if USDA receives applications to add 60 million acres of base, everyone will see a 50% factor applied to their application (i.e., 30 million divided by 60 million). Regardless, assuming there are sufficient applications, this would result in a minimum of 30 million new base acres being added to the program.

Bottom line: this is a significant change from previous law that we expect to be extraordinarily popular among agricultural producers.

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Fischer, Bart L., and Joe Outlaw. “Examining Farm Bill Base Acre Proposals.” Southern Ag Today 4(23.4). June 6, 2024. Permalink

Those who know little about production agriculture will often ask us why we have a farm safety net in the United States. While there are several justifications to choose from, one of the most notable is that farm policy is designed to help level the playing field for U.S. agricultural producers in the global marketplace. In this article, we illustrate the case of rice.

Rice is an important part of the U.S. agricultural economy, particularly in the South where a number of local communities are highly dependent on the rice industry. Despite its importance, U.S. rice production accounted for just 1.2% of global rice production over the past 5 years. Consequently, the price received by U.S. producers is very much a function of market and political dynamics originating in the rest of the world. 

In April 2015, the U.S. International Trade Commission (USITC) reported on the global competitiveness of the U.S. rice industry, concluding that the global rice market was “characterized by significant government intervention in both imports and exports.” One of the most notable serial offenders is India, deploying a cadre of input subsidies and minimum support prices that support their growers to the detriment of producers around the world.  In 2020, our own analysis concluded that U.S. rice and wheat farmers were facing almost $600 million per year in lost sales due to the trade-distorting domestic support policies that were being utilized by India (that number rose to $850 million per year in a 2022 update). In February 2024, Rep. Jason Smith, the Chairman of the House Committee on Ways and Means asked USITC to again investigate the global competitiveness of U.S. rice producers. While we won’t prejudge the outcome of their investigation, we can’t help but note that India’s rice exports more than doubled from 2015/16 (when the last USITC report was written) to 2021/22.  

The bottom line is that producers in other markets have significant, government-sponsored benefits that advantage their rice producers over U.S. rice producers. All of this helps to explain why 2022/23 marked the lowest level for U.S. rice exports since 1985/86 (Figure 1). While previous Southern Ag Today articles have explored the temporary reprieve resulting from India’s recent export ban (see here and here), the eventual return to status quo will inevitably result in lower prices for producers around the world, including in the United States. 

All of this serves as yet another reminder of the importance of the farm safety net in leveling the playing field for America’s agricultural producers. It also magnifies the importance of updating the farm safety net in the next farm bill to ensure that it is reflective of the risks currently being faced by America’s agricultural producers.  

Figure 1. U.S. Rice Exports from 1985/86 to 2022/23.

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Fischer, Bart L., and Joe Outlaw. “Leveling the Playing Field for U.S. Agricultural Producers.” Southern Ag Today 4(15.4). April 11, 2024. Permalink

The Further Continuing Appropriations and Other Extensions Act, 2024 (P.L. 118-22) was signed into law on November 16, 2023.  The bill extended various programs, including the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, through September 30, 2024.  As a result of the extension, ARC and PLC will be in place for the 2024 crop year under the same parameters as those negotiated in the 2018 Farm Bill (i.e., the same base acres, program yields, and Reference Prices, etc).  Growers have until tomorrow (March 15, 2024) to make an election between ARC and PLC on a crop-by-crop and farm-by-farm basis and to enroll their farm(s) for the 2024 crop year. 

If you are unable to make it to your local Farm Service Agency (FSA) office by the close of business tomorrow, we highly encourage you to call the office to inquire about the possibility of getting on a register to preserve the option of signing up at a later date. Under the 2018 Farm Bill, the election and enrollment are an annual decision; as a result, even if you haven’t participated in recent years, you should be able to sign up for 2024 if you wish (assuming there aren’t other factors impacting your eligibility).

For many growers in the South, March 15^th is also the Sales Closing Date for crop insurance on several crops.  As we noted in an earlier Southern Ag Today article, we highly encourage you to consider your FSA enrollment in light of the crop insurance options available to you. In many cases, the decisions you make on one will affect the other.  For example, you cannot participate in the Supplemental Coverage Option (SCO) on a farm if the base acres for that crop have elected ARC for the crop year (and vice versa, especially for winter wheat producers who have already purchased SCO on the 2024 crop).  Similarly, cotton producers cannot purchase a Stacked Income Protection Plan (STAX) policy on any farm (FSA Farm Number) where the seed cotton base has been enrolled in ARC or PLC for that crop year.

Despite bearish prices for many commodities, ARC and PLC are still unlikely to provide any assistance in most cases.  As a result, we highly encourage you to consider all of the crop insurance options available to you – including area-wide options like STAX, SCO, and the Enhanced Coverage Option (ECO) – before making your FSA election/enrollment decisions. 

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Fischer, Bart L., and Joe Outlaw. “ARC and PLC Deadline TOMORROW!” Southern Ag Today 4(11.4). March 14, 2024. Permalink