Every five years or so since 1933, the United States Congress has passed the Farm Bill. First created during the Great Depression to assist farmers who were struggling, today’s Farm Bill sets the tone for agricultural and food policy for the United States Department of Agriculture (USDA).
Each new omnibus bill amends and suspends parts of permanent law, and reauthorizes, amends or repeals parts of previous Farm Bills. It also outlines new policy provisions related to commodity programs, trade, rural development, farm credit, conservation, agricultural research, food and nutrition programs, and more.
The most recent Farm Bill was enacted in 2014 and largely expires on Sept. 30, 2018. Crop provisions continue through the 2018 harvest and a few other provisions, like nutrition programs, don’t expire at all. This means information gathering, congressional subcommittee hearings and rural listening sessions, are well underway to determine the contents of the next Farm Bill. Though dynamics are shifting fluidly in both the farm economy and political landscape of Capitol Hill, industry experts predict the House and Senate could release initial drafts of the next Farm Bill by the end of the year—surely not without a little drama.
The eventual 2014 Farm Bill discussions began in 2011 and took five separate floor votes over three years to become law. It takes 218 votes to pass a bill in the U.S. House of Representatives. Only 34 out of 345 Congressional districts are more than 50 percent rural, and more than half of all Congressional districts are more than 86 percent urban. Passing the next Farm Bill is going to take a strategic coalition of support from across the U.S.
As a farmer-owned cooperative, Land O’Lakes, Inc. is keeping a close eye on Capitol Hill as these discussions heat up. We’ve already begun educating new members of Congress on the importance of farm programs. And over the next few months, we’re bringing you a summary of the titles—commodities and insurance, conservation and nutrition—that have the most impact on our business, what we’re doing to influence and most importantly, what you can do to advocate.
Current state: Title I: Commodities and Title XI: Crop Insurance
Since our nation’s beginning, policies have been in place to incentivize the production of commodities: wheat, corn, cotton, etc. that are essential to society. Today, the commodities title is designed to provide income assistance to farmers who produce barley, corn, pulse crops, rice, sorghum, soybeans, wheat, minor oilseeds, dairy and sugar.
The 2014 Farm Bill created significant changes to Title I that affect our industry and our member-owners. For dairy, it ended some existing programs like the Milk Income Loss Contract program and, in turn, created the Margin Protection Program (MPP), which provides dairy producers with payments when dairy margins fall below their chosen coverage levels.
For crop growers, it ended traditional direct payments and created the Price Loss Coverage program that uses reference prices and the Agriculture Risk Coverage (ARC) program to serve as the revenue loss coverage program.
Title XI of the Farm Bill addresses crop insurance, which remains a crucial tool for farmers to protect against losses in yield, crop revenue and farm revenue. The 2014 Farm Bill made more than 100 crops insurable and offered new farmers and ranchers access to crop insurance. Although important cuts to this program are frequently proposed in Congress.
What changes are being discussed?
For dairy, four major changes are being proposed based on a recommendation by the National Milk Producers Federation board of directors which includes Cornell Kasbergen; Levi Ransom; Land O’Lakes board directors; Pete Kappelman, Land O’Lakes board chairman and Beth Ford, Land O’Lakes Group EVP and COO.
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Restore original feed cost formula and adjust feed and milk price data sources
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Improve the accuracy and affordability of MPP premium rates
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Adjust the timing of margin determinations and annual sign-up
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Expand Livestock Gross Margin (LGM) program and allow compatibility with MPP
For commodity crop programs, priorities and proposed changes are still emerging. Two areas of early discussion include developing new options for cotton growers and adjusting how ARC works at the county level. Proposals to limit crop insurance funding are expected from both parties while Members of Congress who support crop insurance are working to show the benefits of risk management programs, both on-farm and for domestic food security.
What is Land O’Lakes advocating for?
Net farm income has fallen 50 percent since the last Farm Bill was passed. Commodity prices are sure to rise and fall over the life of the next Farm Bill as well. Land O’Lakes is committed to advocating for policies that help producers manage the volatility inherent in agricultural production.
We’re working with the National Milk Producers Federation and Congress to advocate for changes that will make MPP more effective. We’re also working through the National Council of Farmer Cooperatives to support a robust set of risk management tools, including maintaining the existing crop insurance program.
Be an advocate
Our Government Relations team is educating policymakers on our stance on the issues, but you can get involved, too. Call, email or meet with your member of Congress to let them know why the Farm Bill matters to you. Even members of Congress from rural areas need to hear what is and isn’t working. Are you interested in inviting them to your farm or co-op? Email governmentrelations@landolakes.com, and they will help you coordinate.
Over the next few months, we’ll bring you a summary of the titles that have the greatest impact on our business. Up next: conservation and nutrition. Interested in any other topics related to the Farm Bill? Email governmentrelations@landolakes.com to let us know and to learn more.