NSAC’s Guide to the 2018 Farm Bill Conference Process
As we barrel toward the expiration of the 2014 Farm Bill on September 30, both the House and Senate have now passed their respective versions of what they hope will become the next farm bill. The House passed its version on June 21 by a narrow and strictly partisan margin of 213-211. The Senate passed its version on June 28 by an overwhelming bipartisan vote of 86-11.
On many key issues related to food and agriculture, the House bill fails where the Senate bill succeeds. This is true for conservation, nutrition and food access, beginning farmers and farmers of color, local and regional food systems, value-added agriculture, rural development, and renewable energy, as well as when it comes to stemming consolidation and economic concentration in farm country.
On Wednesday, July 18, the House voted to form a farm bill Conference Committee, officially kicking off the process of negotiating the two bills. The Senate is expected to take action next week, and then the conference can officially begin. Each member of the Conference Committee will have some influence over what goes into the final farm bill; however, the main drivers of the negotiations will be the chairs and ranking members of the Agriculture Committees. Stay tuned for a blog post next week listing House and Senate conferees.
There may be as few as two meetings of the full Conference Committee: one as early as this month to open discussions, and another to vote on the final conference report at the end of the process. The bulk of the decision-making will likely happen behind closed doors, as it did in the last farm bill process five years ago, and not through active meetings of the Conference Committee as was the norm previously.
Heading into conference, we compare how each of the two draft farm bills measures up on key priorities facing the sustainable food and agriculture community:
- Reforming Commodity and Crop Insurance Programs
- Local and Regional Food & Rural Development
- Beginning and Socially Disadvantaged Farmers
- Agricultural Research
Reforming Commodity and Crop Insurance Programs
Unlike many titles of the farm bill, the House and Senate commodity title (Title I) and crop insurance title (Title XI) are not that different, with one primary exception – payment limitations and means testing (more below). The smaller differences include:
- The House bill modestly increases spending on commodity supports while the Senate bill modestly decreases it.
- The House bill increases spending for the Price Loss Coverage commodity subsidy, while decreasing it for Agriculture Risk Coverage commodity subsidy, while the Senate bill does the opposite.
- Both bills have similar, but not identical, provisions for the dairy program.
- The House bill cuts spending for the crop insurance title, but primarily by cutting risk management education and outreach programs, not by any changes to crop insurance subsidies. The Senate bill does not change overall spending in the crop insurance title, and leaves the education and outreach programs intact.
While the differences are not huge, they may still be the subjects of intense debate, especially in Title I and especially between regional commodity-based factions within the conference.
The big difference between the bills centers on rules for applying the annual, per-farm payment limitation that determines a farm’s subsidy payment amount and the adjusted gross income means test that determines payment eligibility.
By adding numerous new loopholes to payment limits, the House bill effectively guts payment limits in practice, allowing mega farms to collect millions of dollars a year in subsidies. An equally terrible, though transparent and honest approach, would have been striking payment limits from the law altogether.
The Senate bill, by very sharp contrast, includes the amendment brought by Senator Chuck Grassley (R-IA) that narrows existing loopholes, thereby improving enforceability and making the current nominal $250,000 annual payment limit the real payment limit.
The House bill also effectively guts the adjusted gross income (AGI) provision that has been part of the farm bill for many years to prevent millionaires from receiving commodity subsidies. AGI is a measure of net income, or gross income minus all farm and non-farm expenses and deductions. The Senate bill keeps current law intact and goes a step further by decreasing the nominal AGI limit from $900,000 a year to $700,000 a year. (Note: For many married couples, the actual income eligibility threshold can be two or three times higher than the nominal limit.)
It would not be at all surprising if the Title I payment limit and AGI provisions were among the very last issues that will be settled by the conferees.
On crop insurance, both bills keep current subsidy levels intact and neither bill does anything to put any limits on the amount of subsidy any one farm can receive or to make multi-millionaires have to pay more of their own insurance premium subsidies. There are nonetheless some important differences between the two bills. As we detail here, the House bill cuts important risk management education and outreach programs, while the Senate bill does not. And as we detail here, the Senate bill makes important advances for improving conservation outcomes of federal crop insurance and improving access to insurance for diversified farms and for beginning and socially disadvantaged farmers. (Photo credit USDA)