The latest on the 2018(?) farm bill


Hello from the North!  I’m at the Western Ag Econ Association meetings in Anchorage, Alaska, home to 1,900 moose (in the municipality…although there are some within city limits).   One pretty hot topic here has been the farm bill, which has now progressed through the House and as of last night, is in the debate stage in the Senate.  Ag chairman Pat Roberts has told reporters that he’d like a vote before the 4th of July recess, so could happen as soon as the end of this workweek.

This morning, I sat in a talk from Brad Lubben at the University of Nebraska, Lincoln.  In it, he summarized many of the currently proposed changes in the House and Senate versions of the bill.

Things are still preliminary—the House and Senate versions differ and could change quite a bit before the farm bill is finalized.  But here are some key points, with a few of my thoughts on how they will affect Montana producers.

Commodity programs:  These are the ARC and PLC.  (Quick definitions of these programs are here.)   Last time around, Montana producers were a major driving force behind the development of ARC-IC, or ARC-Individual.  The House version of the bill moves to remove ARC-IC.  This will be hard news for some, but overall, there was very little sign-on to this program.  Some commodity groups–in particular some important in Montana–selected into ARC-IC much more than others.  Those include small and large chickpea growers (10% and 8% of farms, respectively), and lentil growers (5% of farms growing lentils) selected ARC-IC.  (You can find more election information on the FSA ARC/PLC page; scroll down for “ARC/PLC Election Data.”)

The House version moves to change the calculation of PLC reference prices.  (Quick refresher: the PLC reference price is the price below which the marketing year average price must decline before a payment is triggered.  A higher market price, all else equal, means smaller payments and a lower likelihood of receiving them at all.  A higher reference price, all else equal, means larger payments/higher likelihood of receiving them.)  Because the House reference price calculation is based on an Olympic average of past year prices–and prices have been relatively low for most crops–reference prices are unlikely to increase.  Any change in reference prices would be a bigger deal for Montana farmers than changes related to ARC, since most Montana producers elected PLC.  In the Senate, one possible amendment being circulated proposes lowering reference prices.

Other potential changes to ARC-CO, or ARC-County, are in how the county numbers are calculated.  Both versions propose changing the yield data to be more representative.  This will likely mean using more RMA (Risk Management Agency) data.

Conservation:  Both versions of the bill propose increasing CRP the acreage cap.  Currently at 24 million acres, the House bill proposes increasing to 29 million, Senate to 25 million.

Crop Insurance:  Currently no major changes being proposed.  Much talk has surrounded doing away with or changing the Harvest Price option on Revenue Protection insurance, but as of now, it appears to be intact.

SNAP:  The larger changes to the farm bill are in SNAP, or the nutrition programs.  These include stricter rules for eligibility and efforts to reduce outlays.  I’ll leave those for a different post.

All of this could and, in fact, is pretty likely to change–so stay tuned.  But that question mark in the title of this post is looking a little more like it might disappear.

(Photo by Alex Butterfield is licensed under CC BY 4.0)


About Author

Kate Binzen Fuller is an assistant professor and extension specialist in the Department of Agricultural Economics and Economics at Montana State University. She holds an M.S. and Ph.D. from the University of California, Davis. Her extension and research program focuses on the economics of farm management decisions, including USDA programs and policies, pest and disease responses, and issues surrounding leasing and land values. Kate’s extension program takes her on the road often, resulting in a rapidly expanding knowledge and appreciation for Montana’s interstates, highways, and (especially) gravel roads.

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