Ag producers dealing with high costs as Farm Bill in doubt

Jun 26, 2024

Producers around the country are encouraging Senators to adopt the latest version of legislation aimed at helping the nation's agricultural sector stay afloat.

Agricultural stakeholders are hopeful this grow season will fair better than last year's.

The United States farm bill is a package of bills traditionally updated every five years to ensure the stability of domestic agricultural supply chains and adequately support producers' needs. This iteration of the bill, entitled the "Farm, Food and National Security Act of 2024," contains heavy emphasis on the "farm safety net" of insurance and relief programs, the expansion of market access, and promoting conservation programs, among many other provisions.

While the House of Representatives' version of the bill was passed through its Committee on Agriculture on May 24, it must still be brought before the full chamber for a vote before it can be advanced to the Senate. Sen. John Boozman, R-Ark., the architect of the Senate version of the bill's text, said more funding is still needed to cover the legislation's safety net provisions.

"From the onset of this process, we have sought to draft a farm bill that reflects the needs of stakeholders," Boozman said in a written statement. "The world has changed dramatically since the 2018 bill became law, and the unprecedented challenges and economic uncertainty that farmers face now are only projected to get worse in the coming years."

The farm bill's origins trace back to the administration of President Franklin Roosevelt during the early 1930s when the country was still reeling from World War I and the effects of both the Great Depression and the Dust Bowl. Today's farm bill is divided into 12 sections known as "titles" that deal with issues related to everything from commodities, conservation, rural development, horticulture, crop insurance, and more.

One section sure to be altered is the bill's commodities title, the last iteration of which lacked sufficient funding and led to disaster assistance being paid out to eligible applicants of the Ag sector, according to Senate Republicans' analysis of the law. Senate Republicans have criticized changes made by the Biden-Harris administration to the national Emergency Relief Program, or ERP, for implementing a progressive payment factorization.

The ERP's new model favors disbursements to applicants with low claim amounts, which Senate Republicans contend unfairly depraves agriculturalists with the "largest economic losses due to catastrophic weather events," according to a blog post from the Senate Ag committee. As commodity prices have cratered in recent years due in part to increased overseas competition, the costs of equipment have risen substantially.

This chart illustrates changes to the Emergency Relief Program for ag stakeholders.

Walt Hagood, Texas Farm Bureau secretary-treasurer, told the Herald that when he first started as a cotton grower around 46 years ago outside of Wolfforth in Lubbock County, the first tractor he ever bought cost roughly $18,000. Now, he said, even used tractors sell for over hundreds of thousands of dollars or more.

"Whether you're established, are in the middle of trying to get established or just trying to get started, it's all problematic because everything is just so astronomical," Hagood said. "It's hard to put it in words what it takes to do this. It's just incredible. And so there's not a lot of people just standing in line wanting to do it."

Hagood said farmers on the South Plains often try to plant more acres to offset the costs of equipment. Farmers at the beginning of their careers often struggle to accrue the needed capital to get started, which is why the Farm Service Agency offers a variety of loan programs like the one Hagood utilized when he first started.

Though ag stakeholders in various parts of the country all have differing needs, the farm bill omnibus must be tailored into a near one-size-fits-all piece of legislation. Hagood explained that this balancing of priorities between lawmakers is what causes the needs of some producers to be overlooked.

"We deal with issues that [other producers] don't deal with, and vice-versa," Hagood said. "Well, now you broaden that out to all the cotton that is grown in say Arizona, or in the Mississippi Delta, or all the way out to North Carolina. Various places– they have their own kind of regional needs."

For cotton growers, specifically, Hagood said these needs encompass improvement to safety net programs like agriculture risk coverage and price loss coverage crop insurance, and added leeway to purchase additional coverage for crops through programs like the Stacked Income Protection Plan or the Supplemental Coverage Option.

The House's version of the bill would incorporate an increase in reference prices across all commodities between 10% and 20% in an effort to stifle inflation and rising costs. The Senate GOP proposal would meanwhile increase price loss coverage reference prices by 15% to help offset increased input costs.

In March, a bipartisan group of Senators urged members of the Ag committee to incorporate permanent disaster assistance into the farm bill's frameworks to avoid unnecessary delays in disbursement and to establish an indefinite system for delivering relief to producers suffering from natural disaster. Although support for a new farm bill has received both bipartisan and bicameral support, some in Congress are warning that an extension of the existing law may be more likely than the passage of a new version.

Reporting from the trade publication Agri-Pulse on Friday indicated Sen. Debbie Stabenow, D-Mich., chair of the Senate Ag committee, expressed doubts about whether the House version farm bill would receive enough support to pass through the full chamber, and that the Senate version would likely suffer the same fate if it manages to pass through committee.

Sen. Roger Marshall, R-Kan., echoed this sentiment in an interview with Brownfield Ag News, explaining that disagreements over changes to conservation programs threatened to derail negotiations. Marshall said Stabenow's proposal in response to the GOP framework would require farmers to plant "cover crops," or plants intended to cover soil instead of being harvested, in order to "access some of the conservation programs."

The farm bill's current extension, passed in November 2023, is slated to expire at the end of September. However, some optimism for a new farm bill this year remains as Sen. Chuck Grassely, R-Iowa, indicated to Brownfield Ag News that conversations with Stabenow had been productive and that members were making a "good faith effort to move ahead" with the bill.

"We hope lawmakers will seriously consider the farm bill proposal from Senate Ag GOP and work together to create a bipartisan bill that protects our farmers and ranchers, thereby strengthening our industries and economies," officials from Plains Cotton Growers said in a written statement. "We will continue to provide updates as we work toward finalizing a robust farm policy in 2024."