Farm Bill Outlook as Congress Enters Summer “Recess”
As July comes to a close, Congress is about to begin its August recess, so there will be no official Congressional legislative action until after Labor Day. In fact, the House is scheduled to be in session 12 days in September and the Senate 17 days. In the October to December timeframe, the Senate is currently scheduled to be in session 44 days and the House in session 24 days.
At this time, both the House and Senate Agriculture Committees are laser focused on drafting their respective versions of the new Farm Bill. There is a tremendous amount of staff work that must be done to develop the legislation that can be considered by the Agriculture Committees and then brought forward for consideration by the full House and Senate. Many of the decisions that must be made are largely determined based on the cost of changes to policy, or putting in place new policy, and these cost estimates are determined by the Congressional Budget Office (CBO). As of late, there are prolonged delays in getting cost estimates from the CBO, which then delays the ability of the Committees to make decisions on policy changes.
While there is largely a general consensus that the safety net for producers needs to be strengthened in this farm bill, primarily through an increase in reference prices for the Price Loss Coverage (PLC) program, the cost of such an increase and where to find the necessary budget resources continues to be a hurdle for the Committees to address. One potential area of new budget resources for the farm bill budget (budget baseline) is the Inflation Reduction Act, which included nearly $20 billion in new funding for working lands conservation programs. There is agreement among the four Agriculture Committee principals – Sens. Stabenow (D-MI) and Boozman (R-AR) and Reps. Thompson (R-PA) and D. Scott (D-GA) – to incorporate those new funds into the farm bill baseline. However, differences remain about how to allocate the funding in the farm bill – either maintain all the funding in conservation programs focused on climate-smart ag. purposes, or redirect some of the funds to other needs such as strengthening the producer safety net. In addition, there are differing viewpoints around what additional policy changes should be made to the nutrition programs.
New and evolving policy positions continued to emerge from major agricultural organizations. For example, the National Corn Growers Association voted last week to support a mandatory base acre update. This is the first major commodity organization to take this position, while some other groups such as the American Soybean Association supports a voluntary base acre update. The challenge with mandating a base acre update is that it creates winners and losers across almost every county, state, and region in the country and among the various ‘program crops’ that have base acres that are eligible for farm programs like ARC/PLC.
In terms of timing, we expect serious work to continue at the Agriculture Committees through August, while Committee Members are traveling around their states and districts gathering additional input and perspectives for the farm bill from their constituents. At this time, we don’t anticipate either the House or Senate Agriculture Committee considering its version of the farm bill before October at the earliest. And while we may see the Senate and/or House pass its version of the farm bill later this fall, we don’t expect a final farm bill to be completed and signed into law until the first quarter of 2024 at the earliest.