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Mid-Mo farming groups concerned about status of federal farm bill

Mid-Mo farming groups concerned about status of federal farm bill

September deadline approaches

June 10th, 2018 by Philip Joens in Local News

Mark Wilson/News Tribune Jay Fischer plants soy beans at his farm north of the river in Jefferson City.

With the clock ticking, farming groups around Mid-Missouri worry a new farm bill may not pass Congress before the existing bill expires Sept. 30.

The U.S. House failed to pass its version of the farm bill in mid-May amidst fighting between Republicans and Democrats and infighting among Republicans.

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Farmers see the farm bill as a lifeline that supports crop insurance and other subsidiary programs they can't survive without. As the calendar nears September, local farmers said they again expect to see break-even prices this season.

The nearly $1 trillion existing farm bill is a behemoth of a piece of legislation. About 80 percent of funding in the bill goes to the Supplemental Nutrition Assistance Program, commonly known as food stamps, according to the U.S. Department of Agriculture. Crop insurance programs, which protect farmers in the event of sudden price declines or weather events, make up another 8 percent of the current bill.

"When it's needed, it's a big benefit when we have a claim, but most years, we're just paying a premium and not getting anything back," Missouri Farm Bureau Vice President Todd Hays said. "Folks think it's just a handout. It's not."

The farm bill also stipulates how subsidy payments that keep food prices low can be made. The 2014 bill repealed provisions that allowed automatic direct subsidy payments to farmers.

Payments from commodities programs that protect farmers when prices sag or during poor weather events make up 5 percent of the bill. Conservation payments that provide 10- to 15-year contracts to remove land from agriculture use for environmental reasons make up 6 percent.

Rural areas also benefit from money set aside for numerous other programs in the 2014 bill, like $15 million to support rural businesses, $150 million for water and wastewater infrastructure, $200 million for international market development, $200 million for ag research, $880 million for renewable energy programs and $100 million to support young farmers.

In many ways, the farm bill removes uncertainty from farming by giving farmers safety net programs in the event of natural disasters, droughts, floods or poor growing seasons. Hays said payments can come as late as 18 months after an event, but those payments provide a means to stay in business.

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"The whole reason this is in place is to keep farmers in production," Hays said. "Without this, there would be so much more turnover in operators, and you would probably see less people wanting to get into farming."

Net farm income increased slightly last year for the first time since 2013. In March, the USDA forecast net farm income would fall 6.7 percent to $59.5 billion. If this happens, it would be the lowest net farm income total since 2006.

If the bill fails to pass before Sept. 30, most farmers likely won't notice an immediate difference. Jay Fischer, who owns a farm northeast of Jefferson City, said when the 2008 farm bill expired in 2012, Congress passed extensions until then-President Barack Obama signed a new farm bill in February 2014.

Congress funds programs through the federal fiscal year that expires Dec. 31, NPR noted in 2012. If an extension fails to pass Congress, federal price supports would revert to their 1949 levels.

Crop insurance prices and levels of protection are determined by county.

Brian Lehman, who farms about 500 acres of corn and 500 acres of soybeans near Versailles, said it's hard to predict how it would affect farmers if the farm bill expires because many of the benefits vary from farmer to farmer.

Passing the farm bill is critical before USDA funds used to open new markets run out, though, Lehman said.

"If there's not funding to go in them, it's a lot harder to get resources into other countries to access the markets and develop new ones," Lehman said.

The U.S. House failed to pass the its version of the farm bill May 18. At the time, House leadership put the bill on the floor despite unanimous Democratic opposition. The gamble failed, as 30 Republicans joined 183 Democrats to defeat the bill 213-198.

Mid-Missouri industry officials said the situation highlighted the worst of Washington politics: a critical bill with bipartisan support that was undone by infighting between Republicans and Democrats on unrelated issues attached to the bill. Among moderate Republicans, the farm bill became a bargaining chip for those who wanted to force a vote on an unrelated immigration bill. Republicans and Democrats also split because of provisions that mandated new work requirements for SNAP beneficiaries.

"In typical D.C. fashion, they muddle it up instead of focusing on the need to get things done," said Dan Mehan, president of the Missouri Chamber of Commerce and Industry. "If you're going to do an immigration bill, do an immigration bill. If you're going to do an ag bill, do an ag bill."

A second vote on the $867 billion House bill will be held around June 22, according to CNBC. The Senate's version of the new farm bill will be voted on around July 5, Reuters reported.

U.S. Rep. Vicky Hartzler, R-Columbia, sits on the House Committee on Agriculture and acknowledged last month's vote was a setback for farmers. An immigration bill will be voted on before the farm bill, Hartzler told the News Tribune.

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Hartzler voted for the last version of the bill, as did Rep. Blaine Luetkemeyer, R-St. Elizabeth. She feels optimistic a new farm bill will pass both chambers before the current bill expires Sept. 30.

"I don't think the immigration issue will ultimately derail the bill," Hartzler said. "Once that immigration issue is settled, we will be able to vote on the farm bill."

Both of Missouri's U.S. senators voted for the 2014 farm bill.

U.S. Sen. Roy Blunt, a Republican, told the News Tribune the farm bill affects every Missouri family. Blunt said he looks forward to reviewing the bill and working with Republican and Democratic colleagues to ensure policies in the bill support farmers.

"Missouri's agriculture industry drives our state's economy," Blunt said. "We have a big opportunity ahead of us if we have the right policies in place to support continued growth in the ag industry."

McCaskill told the News Tribune both parties support the Senate's farm bill; she hopes the bill will pass this summer.

"I'm hopeful we'll be able to pass the farm bill so we can provide Missouri's farmers the certainty they so desperately need," McCaskill said. "In the Senate, we all understand that this isn't about party, this is about making sure that our agriculture in this country continues to be such an important part of our economy."

Hays remained cautiously optimistic a new farm bill will pass before the end of September.

"I think there's some give and take going on in the process of creating a new farm bill," Hays said. "I think they'll work something out and hopefully get it done."

Other farm industry experts did not sound as optimistic.

Missouri Corn Growers Association CEO Gary Marshall said he never thought proponents had the votes to pass the bill in May. Marshall said the Senate version of the bill will likely pass in the next few weeks, but the House version might not pass until the lame duck session of Congress after the 2018 midterm elections.

"I suspect it's going to be a tough sell to get it passed this year," Marshall said. "They're not going to like the Senate bill, so I just think it's going to be tough to acquiesce around something that gets into conference committee."

Lehman said the farm bill affects almost everyone in America in some way. He tries to remain optimistic but also thinks the bill will be hard to pass.

"The farm bill is so huge that it affects everyone in America that eats," Lehman said. "If they're going to throw immigration into the farm bill and some of those programs that have no relation to farmers, it's going to be hard to do."

To pass the House bill, members of Congress will need to resolve demands from House Republicans that require able-bodied people receiving SNAP benefits to work at least 20 hours per week. If this rule is put in place, up to 2 million people would lose SNAP benefits, according to the left-leaning Center on Budget Priorities and Policies.

Hartzler supports this provision because she believes it will help businesses that need workers and workers who need jobs.

"We need individuals working, and we want to give them the training to link them to a job in their community," Hartzler said. "Everybody who qualifies will be able to continue to receive their SNAP benefits."

Fischer said he hates that SNAP benefits get dragged into a bill that's supposed to support farmers nationwide, but he understands food stamps long ago became part of farm bills.

"It's been part of the farm bill since long before I was around," Fischer said. "That's pretty far removed from agriculture."

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The bill also makes a change that could allow wealthy farm owners to receive farm subsidies. Congress began adding means-based testing in 2002 to prevent subsidies from going to wealthy farm owners. The House bill would add an exemption for pass-through businesses allowing them to skirt these testing requirements. This could make billionaire farm owners eligible for subsidies with a simple accounting trick.

Hartzler said most pass-through businesses are still family businesses that need access to these funds.

"It's just as bad if a large farming operation goes under as a small one," Hartzler said.

Commodities prices peaked around the time the 2008 farm bill initially expired. Corn prices peaked near $8 per bushel in late 2012. Soybean prices peaked in mid-2012 around $17 per bushel.

In May the USDA said it expected season-average corn prices of $3.30-$4.40 per bushel, up 40 cents from estimates at the same time last year. Season-average soybean prices of $8.75-$11.75 per bushel were up from $9.35 per bushel last year.

When prices were high, farmers needed the safety nets but didn't use them as much as they do now when prices are low, Hays and Fischer said. If prices remain higher than last year, payments from the two federal government-backed crop insurance programs are expected to decline by about $1.8 billion, according to the USDA. While prices have declined since 2012, the USDA said yields have increased and offset some revenue losses from lower prices.

Still, Fischer said farmers need some certainty right now.

"We're kind of stuck in a rut," he said. "We're raising corn for break-even prices."