Outlook for the Next Farm Bill
In the last two weeks, U.S. Secretary of Agriculture, Tom Vilsack, has testified before four different committees on Capitol Hill. In his testimony before both the Senate and House Agriculture Committees, the Secretary highlighted the current financial situation of production agriculture, noting a need to help more small and mid-size producers improve their income opportunities from agriculture and not remain so reliant on off-farm income, which has become an increasingly common scenario. Secretary Vilsack defended USDA’s actions to update the Supplemental Nutrition Assistance Program (SNAP), which has led to an increase of approximately 80% in expected costs for the program since the 2018 Farm Bill was approved. The Secretary also highlighted support from grower groups and agricultural organizations for the Partnerships for Climate-Smart Commodities grants to focus on climate-smart agriculture in 141 pilot projects using $3.1 billion in USDA Commodity Credit Corporation (CCC) funding.
In the other two hearings, Secretary Vilsack was testifying before the Senate and House Agriculture Appropriations Subcommittees in support of USDA’s budget request for the fiscal year 2024. In both hearings, the Secretary also faced questioning and criticism for some of the “unilateral” decisions USDA has taken to allocate and spend USDA resources without more consultation and involvement from Congress, particularly in light of the current fiscal situation and the need to address Federal spending across the government.
As Members of Congress and numerous agricultural and commodity organizations continue to outline their priorities for the new Farm Bill, the expected costs and need for additional budget resources are coming into greater focus. For example, there is widespread support and priority on increasing the reference prices for commodities in the Price Loss Coverage (PLC), given the tremendous increase in most input costs relative to the references prices that were last set in the 2014 Farm Bill based on 2012 costs of production. Even a modest increase in reference prices is likely to cost $10 to $20 billion over a 10-year budget window. There are requests to improve the safety net for specialty crop (fruits and vegetables) producers through improved risk management/crop insurance options, and additional funding promotion for trade programs and agricultural research.
At the same time, most Democrats in Congress and many outside groups are also focused on maintaining the current policy and funding for SNAP and broader nutrition programs in the Farm Bill. Further, some Congressional leaders and conservation/environmental groups want to protect the new funding ($19.5 billion) added to the Farm Bill Conservation Title working lands conservation programs through the Inflation Reduction Act (IRA) Congress approved last year.
If the IRA funding and nutrition programs in the Farm Bill are “off limits” for potential budget savings, then the only option for improving the safety net for farmers through higher reference prices and enhanced crop insurance and/or standing disaster assistance programs is by finding new funding for the Farm Bill — a tall order in the current fiscal environment Congress is operating in. This situation, coupled with the impending debt limit increase that will be needed by late summer, creates a significant challenge for the Agriculture Committees as they seek to establish policy priorities that will inevitably require additional budget resources. Due to the wide-ranging implications of the debt limit issue, the availability of any additional budget resources for the next Farm Bill, and the development of any key policy improvements in the next Farm Bill, will likely not be addressed until the debt limit increase is addressed by Congress later this summer.
At this time, both the Senate and House Agriculture Committees are accepting input from all Farm Bill stakeholders through formal such as ongoing Congressional hearings and listening sessions, and also from the broader stakeholder community through online portals.
To submit your input, recommendations, and priorities on Farm Bill policies, please use the following links to the respective Agriculture Committee.
Senate Agriculture Committee Farm Bill portal: Farm Bill Input | Senate Committee On Agriculture, Nutrition & Forestry
House Agriculture Committee Farm Bill portal: 2023 Farm Bill Feedback | House Agriculture Committee