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The ins and outs of the 1st draft of the 2018 Farm Bill

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The first 641-page mock-up of H.R. 2, Agriculture and Nutrition Act of 2018 was introduced by House Agriculture Committee Chairman Mike Conaway and other members of the committee! It is titled, H.R.2, because of its significance to the GOP and falls behind the recently passed H.R.1, or Tax Bill. It is projected to cost just over $860 billion dollars over the next decade and is approximately $100 billion short of the projected cost of the 2014 bill, which expires in September 2018. Conway stated that new money wasn’t available in this bill so certain programs were cut.

After months of discussion, the bill text has been released and can be found here.

As the buzz of the first draft of the 2018 Farm Bill carries on, farmers and ranchers are looking at many of the programs that affect their operations. Among those programs are the Dairy Risk Management Program — formerly known as the Margin Protection Program — the Conservation Reserve Program, Foot-and-Mouth Disease, and rural broadband. There’s also the SNAP program mixed in.

The bill’s lengthy, political text might be confusing, so let’s break down the language and summarize the new Farm Bill.

Dairy Risk Management

Dairy Risk Management is one of the most discussed programs for this Farm Bill, in my previous article regarding the Margin Protection Program, dairy producers wanted better benefits than were offered in a weak MPP. The summary of the 2018 draft bill stated, “The Margin Protection Program is renamed the Dairy Risk Management (DRM) program. The first 5 million pounds of milk production on a dairy is made eligible for higher coverage levels at lower premiums. Milk production not covered under DRM is made fully eligible for a comparable crop insurance policy. Finally, feed costs are studied to ensure accuracy in the DRM, and class I milk calculations are adjusted to help dairy farmers better manage risk in the futures market.”
To compare, this is the summary of the MPP as it was on the 2014 bill found on thefarmbill.com — “The program offers dairy producers: (1) catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee; and (2) various levels of buy-up coverage. Catastrophic coverage provides payments to participating producers when the national dairy production margin (the difference between the all-milk price and average feed costs) is less than $4.00 per hundredweight (cwt). Buy-up coverage that provides payments when margins are between $4.00 and $8.00 per cwt. The program is administered by the USDA’s Farm Service Agency.”

Other changes, as listed on dairyherd.com include, “Requiring the USDA Secretary to report on the accuracy of the data used to calculate the average cost of feed used by dairy operations to produce a hundredweight of milk and on the costs of using corn silage as a feed and the difference between feed cost of corn silage and feed cost of corn and requiring NASS to revise monthly survey reports to include prices for high quality alfalfa hay in the top 5 milk producing states as measured by milk produced in the previous month.”

Conservation Reserve Program

When we discussed the Conservation Title in my conservation article, the American Farm Bureau Federation had hoped to maintain the CRP (Conservation Reserve Program) at the current 24 million acres. With the House version of the bill, this program would increase the acreage by 5 million, to 29 million acres, of land that can participate in this program. With no “new money” available on this bill, according to Conaway, the funding to increase this program changed as well.

“We will put a limitation of 80% of the rental value in a county,” stated Rep. Collin Peterson in an article with Successful Farming. “So, no CRP payment will be higher than 80 percent of the rental value in the county. We have been overpaying for the CRP. The reason I believe that has happened, is that it [the CRP] has been hijacked by environmentalists. It drove the price up.”

However, as debate continues with this bill, there might be snags. “A 29-million-acre CRP isn’t a given for a 24-million-acre cap is being promoted by feed and grain dealer groups,” Peterson said. Another stickler, he said, is a move to prohibit “prime farmland” from being in the CRP. “From what I can tell, there is no working definition of what prime farmland is,” he said. “So, if you want to talk about a fiasco, give the USDA a requirement to define good farmland. We put a wetland rule in 1985 and still have not been able to define what a wetland is even today. Prime farmland in Iowa is different in Iowa than in Nevada or western Texas.”

Foot-and-Mouth Disease

Foot-and-Mouth Disease was a huge target for livestock producers, and organizations such as National Cattlemen’s Beef Association, as covered in this article. A statement on NCBA‘s website said, “NCBA strongly supports a strong animal-health program, including an FMD vaccine bank that is fully funded and can quickly respond to any size outbreak. FMD is considered one of the most contagious and economically devastating livestock diseases. without this vaccine bank, there is a major risk of crippling effects to the livestock industry and lasting ramifications throughout agriculture.”

The new Farm Bill, as stated on the summary, “Provides $450 million to enhance USDA’s ability to identify, diagnose and respond to a potential animal disease outbreak. The bill establishes a new National Animal Disease Preparedness and Response Program, designed to protect the health of the nation’s livestock sector. The program is modeled on the highly successful Plant Pest and Disease Management and Disaster Prevention Program that has strengthened USDA’s ability to protect U.S. agriculture and natural resources from foreign plant pest threats. The bill also establishes a new U.S.-only vaccine bank with priority for stockpiling Foot-and-Mouth Disease (FMD) vaccine and provides for the enhancement of the National Animal Health Laboratory Network. The bill also directs the secretary to include veterinary teams, including those based at colleges, in training programs to respond to endemic diseases, requires FSIS to evaluate the effectiveness of outreach to small and very small meat processors, and maintains the National Aquatic Animal Health Plan to detect, control, and eradicate diseases of aquaculture.”

According to Agri-Pulse.com, “The bill authorizes the $150 million sought by the industry for the FMD vaccine bank, $30 million for the National Animal Health Laboratory Network, and $70 million for the National Animal Disease Preparedness and Response Program for a total $250 investment. In the following years, however, the funding drops to an annual $50 million, with $30 million for the National Animal Disease Preparedness and Response Program and $20 million for any of the three components at USDA’s discretion.”

Rural Broadband

There was an apparent need for better broadband access to rural communities; recall my rural broadband article. So far, the changes to rural broadband listed in the bill’s summary state, “Broadband service to rural America is enhanced, especially to unserved and underserved areas. It provides strong incentives for providers to offer quality broadband service to all of rural America, particularly harder-to serve areas of the country, so today’s families can live and work in these areas.”

A statement from the Rural Broadband Association said, “NTCA-The Rural Broadband Association looks forward to working with the House Agriculture Committee on the recently released Farm Bill. We appreciate the Committee’s focus on ensuring U.S. Department of Agriculture broadband programs are helping meet the needs of rural Americans. In the weeks and months leading up to the release of this Farm Bill, NTCA members welcomed the opportunity to testify before the Committee to share the importance of streamlining the USDA RUS program application process, accounting for ongoing federal broadband efforts, investing for the long-term, and looking to providers with a proven track record of success deploying and maintaining services in rural communities. …

“We thank the Committee for its work and recognition that broadband is critically important to the future of rural America.”

To read the legislation regarding rural broadband proposals, read the bill text in section 6101.

SNAP

This program, which falls under Title IV and is the section with the most financial input, was the major deciding factor for a bipartisan bill, and a huge controversy the past couple months in getting the bill drafted. Republicans wanted a reform that incentivized work and created a new box-food delivery program. Democrats didn’t totally agree with their ideas and stated they would not vote to pass a bill if they couldn’t find common ground. In the official press release, Conaway noted that this was the only title that didn’t have bipartisan agreement. Regardless, the changes proposed, after 21 hearings and three years, were left on the draft bill, and Conaway invited Democrats to re-join in support of the bill.

Changes were made to workforce development, modernize asset testing, and utility allowances. Here are the biggest 2018 bill changes, as found on the Ag House Committee’s website:

Workforce Development:

  • Establishes a substantive work requirement for all work-capable adults (aged 18-59) — thus eliminating both the general work requirement and the ABAWD time limit — with exemptions for specific populations including the elderly, disabled and those who are pregnant;
  • Energizes and prepares work-capable adults for self-sufficiency by modernizing the investment in SNAP E&T, providing case management, guaranteeing access for all participants and enhancing the current scope of services offered by states;
  • Provides a two-year transition period to states, allowing them to increase their access and capacity in program delivery;
  • Does not take away eligibility, but provides individuals options. Individuals may choose not to participate, but they will no longer be eligible for SNAP; and Instead, the 2018 Farm Bill provides an effective work requirement of 20 hours per week, coupled with flexible means of delivery, recognizing states know their populations best

Modernize Asset Testing:

  • Eliminate Broad-Based Categorical Eligibility, limiting the use of categorical eligibility to those actually receiving tangible services (e.g. child care or transportation assistance) or cash assistance from TANF.
  • Modernize values for assets, many of which have not been updated since the 1970s, and require they be enforced.
    • Allowable asset levels: For households without an elderly or disabled member, households with up to $7,000 in countable assets (up from $2,250) may be eligible. For households with an elderly or disabled member, households with up to $12,000 in countable assets (up from $3,500) may be eligible.
    • Updates in exclusions from countable assets: Exclude the first $12,000 in value of one vehicle per licensed driver (updated from $4,650 per adult household member). Exclude the first $2,000 in a household’s savings accounts (new exclusion). 
  • Maintain that counted financial resources. DO NOT include the value of the primary home and lot; household items; business assets, including vehicles used for income producing purposes; property that produces income; retirement savings/plans; funeral plans and burial plots; education savings; and earned income tax credits.

Utility Allowances:

  • Requires non-elderly households to incur and demonstrate heating or cooling expenses to receive a standard allowance for such expenses.

Other topics regarding SNAP included the expansion of the program to remove the base housing allowance, which currently counts as income for military members, and in turn, allowing access to benefits for more active duty military. Conaway stated that the expansion would exempt the first $500 of base housing allowance from the income and resource desk. He also mentioned a woman, who spoke in front of the House, stating that her successes in life and who as a young mother used SNAP benefits to complete her undergraduate and graduate programs to become a school administrator. Because all relied on public assistance, and she said she was in a better place because of the resources from SNAP.

“That had a dramatic impact on me. That’s the outcome we want … that’s the success we want … that’s what we want to replicate with our SNAP program,” Conaway said in response to her story. “With case management and assessments, we will be able to deal with the population the right way, one at a time. You can’t fix the group, you fix them one at a time and providing resources to states to mandate that we think is a good use of our resources.”

He also stated the new database, Duplicative Enrollment Database, for SNAP will bring better program integrity and that the bill is budget neutral, meaning spending wasn’t cut to fund other programs. To compare what the current bill allows and what the 2018 bill proposes, read the summary of the SNAP program. This is still a highly controversial topic, and with democrats not supporting the bill, could cause more bumps in the road to pass the bill into law.

Sonny Perdue chimed in on the release stating, “While there is still much work to be done, I am pleased that this Farm Bill aligns with many of the principles USDA released in January. I look forward to working with the Agriculture Committees and members of Congress from both sides to pass a comprehensive Farm Bill in a timely fashion to provide the needed support and certainty to our farmers.”

According to the official press release with  Conaway, the bill will be marked up Wednesday, April 18, starting at 10 a.m., and move it forward. Amendments are due by Monday, April 16. Conaway said his priority is getting the bill out of the committee. He also mentioned that the Senate is anticipated to write up a similar bill with their proposals regarding SNAP.

“Every bill at this stage can be referred to as a work in progress, this one is exactly the same way,” said Conaway. “I’m driven to get it done on time.”

As the next few months go by, be on the lookout for more updates, possible changes to SNAP and the signing of the 2018 Farm Bill into law. For a section by section text of the bill, click here.

 

 

Markie Hageman is a senior, majoring in agribusiness, at Fort Hays State University. She is actively involved in her state Cattlemen’s Association, Young Farmers chapter, and National Cattlemen’s Beef Association. Follow her series exploring various parts of the next Farm Bill.

Any views or opinions expressed in this article are those of the author and do not reflect those of AGDAILY. Comments on this article reflect the sole opinions of their writers.
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