Congress Provides One Year Farm Bill Extension; What’s Next for Developing a New Farm Bill
As we reported in this column last month, time was running short for Congress to complete a new, five-year Farm Bill by 2024 and we noted that an extension of some length would be needed by the end of this year. As a result, Congress chose to include a one-year extension of the 2018 Farm Bill in the short-term funding bill passed by Congress in mid-November. The extension continues all Farm Bill programs until at least September 30, 2024, and some programs will continue through the entirety of next year to cover the crop/marketing year for commodities planted and harvested in 2024. The extension also includes funding to continue the programs that had no funding baseline beyond this year, thus ensuring no lapse in any of the programs and policies.
The Agriculture Committees are facing the same challenges to develop the new Farm Bill: identifying and agreeing on additional funding to enhance the farmer safety net programs; and what new policies or policy updates can get support from the “4 Corners” of the Agriculture Committees – the chair and ranking member of both the House and Senate Agriculture Committees. Despite the one-year extension, the “4 Corners” and national agriculture and commodity organizations are all pushing for a continued focus to complete a new Farm Bill by next summer – ahead of the height of campaign and political season leading into the November 2024 election.
The next major deadlines facing Congress are to address government funding since a portion of the Continuing Resolution (CR) passed this month will expire on January 19 (includes funding for USDA and several other departments/agencies). The rest of the government funding will expire on February 2. Newly elected House Speaker, Rep. Mike Johnson (R-LA), has stated he will not support another CR, meaning Congress much reach agreement on full-year funding bills by the deadlines arriving early next year. Congress is scheduled to be in session three more weeks this year before returning the second week of January.
On the outlook for a new Farm Bill, we anticipate there could be House and/or Senate Agriculture Committee consideration of a Farm Bill proposal in the first quarter of next year. For farmers, ranchers, and their lenders, the good news is that the policy and safety net uncertainty for 2024 has been addressed with the one-year extension. However, Congress must find the necessary budget resources to strengthen the commodity and crop insurance programs to better address the risks of today’s higher cost environment for inputs relative to the costs when the 2018 Farm Bill was developed.
On a related matter, USDA recently outlined the details of the Emergency Relief Program (ERP) for 2022 crop losses. However, the 2022 provisions depart significantly from the ERP provisions in 2020 and 2021. Specifically, USDA is imposing progressive payment factors to prorate payments and changing the method used to incorporate producer-paid insurance premiums into the disaster loss calculation. Last week, a wide-ranging group of agriculture and commodity organizations wrote (link to letter) to Secretary Vilsack urging him to address these two significant changes by implementing ERP in the same manner as USDA did for the 2020 and 2021 program. We will continue to track this issue and provide any updates that may materialize.
We wish you and your families a safe and enjoyable Thanksgiving as we all take time to reflect on our many blessings to be thankful for.