2018 Farm Bill Making Progress
Now up to House and Senate to reach agreement
Late June saw the passing of both House and Senate versions of the $428 billion 2018 Farm Bill, but that doesn’t necessarily mean that a consensus will be reached before the existing Farm Bill expires on September 30. Before we dig into the challenges that still lay ahead, let’s look at what was passed by the House and Senate.
House of Representatives — Agriculture & Nutrition Act of 2018
- Date Passed —June 21, 2018
- Vote Breakdown — 213 to 211, Democrats were in unanimous opposition
- Cost— $387 billion
Senate — Agriculture Improvement Act of 2018
- Date Passed — June 28, 2018
- Vote Breakdown — 86 to 11 vote, overwhelmingly bipartisan
- Cost — $428 billion
In an earlier post, we outlined some of the challenges that faced a smooth passage for the 2018 Farm Bill. While some of those have been sorted out, the current battle lies with food stamps, farm subsidies and conservation funding.
The Supplemental Nutrition Assistance Program (SNAP) accounts for nearly three-quarters of the farm bill’s price tag and aids more than 40 million Americans annually. This year, like many years in the past, it is a point of contention both between and within the House and Senate.
House changes to SNAP include stricter work requirements on 5 to 7 million recipients and restrictions on eligibility that would result in nearly a half-million households losing SNAP benefits. These changes would put thousands of children at risk of losing enrollment in free and reduced-price school meal programs. In the Senate, where bipartisanship was the name of the game, no major program changes were made with the focus more on preventing and combatting fraud.
Key Senators have gone so far as to say they would not support a final bill that contains work requirements, despite support of the initiative by the White House. In the House, Republicans insist that they will not support a version that doesn’t include the cuts. This potential stalemate is causing the fears that the new bill will not be in place by September 30.
Both the House and Senate options largely leave current farm policy intact. (As with most legislation the value of that is dependent entirely on who you speak to.) Nevertheless, the changes that were made — specifically to payment limits — could cause a significant debate.
Unlike their efforts with SNAP, the House farm bill raises existing limits on subsidies. It exempts operations structured as limited liability and S corporations from a $125,000 cap on commodity subsidies and a $900,000 adjusted gross income limit to qualify for those payments. It also allows for additional family members to qualify for commodity subsidies, including first cousins, nieces and nephews.
The Senate version doesn’t contain such changes. The approved plan outlines that farm “managers” not actively engaged in running a farm would not be eligible for subsidy payments. Additionally, further limits were placed the who can quality as being “actively engaged” in farming.
While both the House and Senate agreed to a reduce conservation funding, the House took that to heart slashing the budget by $5 billion over 10 years. Not stopping there, House Republicans have proposed eliminating the Conservation Stewardship Program (CSP). The bill claims to roll the best features of the program into the Environmental Quality Incentives Program (EQIP). There is a concern that these changes will have a significant impact on soil, air and water quality initiatives.
While differences are always present when it comes to finalizing the Farm Bill, the partisan efforts of the House make the 2018 differences atypical. Congress could always extend the existing farm bill if a consensus can’t be reached but nobody wants to see that happen, especially given the challenges that farmers are facing. With that in mind, lawmakers are getting a tremendous amount of pressure from farm groups to ensure that farmers have some level of certainty.
What does this mean for marketers that are involved in the ag industry? On the subsidy front, it could mean that things become even tighter economically for your grower customers. This, in turn would impact the dollars they have to spend on your products and services. When it comes to cuts in conservation funding, this change leaves the door open for marketers to fill a void. Farmers aren’t addressing soil, water and air quality issues because of the program, but it does provide an incentive and additionally assistance. If that were to go away, marketers can step in with programs that aid farmers in that effort.
Right now, all we know for sure is that the discussion leading up to the September 30 deadline will be worth watching.