FOCUS ON AG

Written by Kent Thiesse

Farm Management Analyst and Senior Vice President, MinnStar Bank
August 21, 2023
SEVERAL FARM BILL ISSUES LEFT TO RESOLVE
In early August, FARMFEST hosted one of several U.S. House Agriculture Committee Listening Sessions that
are being held across the U.S. The event was hosted by Committee Chairman, Glenn (GT) Thompson (R-PA).
Several members of the Minnesota Congressional delegation, as well as some U.S. House Ag Committee
members from other States, participated in the Listening Session. The Committee members listened to over 40
two-minute presentations from farmers, ag leaders, conservation supporters, feed bank advocates, and others
during the Listening Session.

Following is a summary of some of the main issues that were raised and discussed during U.S. House Ag
Committee Listening session at FARMFEST:
 Crop Insurance --- Many farm operators and farm organization leaders spoke about the importance of
keeping a strong federal crop insurance program, which several pointed to as the best risk management
tool that crop producers have available to them. The federal government currently covers approximately
60 percent of the premium cost paid by farmers for most common levels of crop insurance coverage.
Crop insurance has been a “financial lifesaver” in recent years for crop producers in many areas of the
U.S. that have suffered crop losses due to natural disasters and poor crop growing conditions.

Some ideas to enhance the crop insurance program that were offered during the forum included the
addition of a 90 or 95 percent coverage option on individual farms, versus the current maximum
coverage level of 85 percent. Adding higher coverage options could provide an extra “safety-net” to help
offset higher crop input and land costs, in the event of natural disasters or very low commodity prices. It
could also reduce the need for the “ad hoc” crop disaster programs, which have become quite prevalent
in recent years. There was also some discussion regarding more support through crop insurance for new
and beginning farmers.

 Commodity Programs --- Most farm operators have a pretty good understanding of the provisions and
calculations in the Price Loss Coverage (PLC) and Ag Risk Coverage (ARC) farm program options in
the current Farm Bill. Most ag groups favor keeping a choice between the revenue-based ARC program
and the price-only PLC program. There was some support expressed for allowing voluntary updates to
crop base acres and for allowing farm operators to adjust their farm-level program yields. There was
also some discussion regarding the difficulty in some instances for new and beginning farmers to
establish base acres and farm program yields. Some presenters also expressed the desire to increase the
number of commodity crops that are eligible for farm program benefits. Of course, most of these
proposals would involve extra funding to achieve these goals, which may be difficult given the current
federal budget deficit concerns.

 Dairy Margin Protection Coverage (DMC) and other livestock programs --- The DMC program is a
voluntary program that was originally developed in the 2014 Farm Bill and was enhanced in the 2018
Farm Bill. The DMC program is designed to help dairy producers offset low profit margins during
difficult financial times, such as haven occurring in recent months in the Upper Midwest. However,
there is concern that the established DMC payment formulas have not kept up with today’s dairy market
environment, and as a result the DMC program is falling short to provide the necessary financial support
to many family dairy farms. There was also support expressed to enhance the Livestock Risk Protection
(LRP) program for beef and hog producers, as well as to increase educational efforts regarding the LRP
programs. Hog producers also expressed concern over implementation of the new “Proposition 12” law
in California, which dictates how hogs are raised in the Midwest for pork that will be sold in California.
  Conservation Programs --- One topic at the Listening Session that seemed to unite ag organizations,
environmental groups, and wildlife supporters alike was continued support for conservation programs.
Much of the discussion surrounded the support for the so-called “climate-smart” agriculture practices
that were included in the Inflation Reduction Act (IRA), passed by Congress in late 2022. The IRA act
included adding considerable funding to the Environmental Quality Incentives Program (EQIP), as well
as to the Conservation Security Program (CSP), both of which focus on voluntary efforts to implement
practices for working farm and ranch operations. Both the EQIP and CSP programs are also part of the
Conservation Title of the current Farm Bill, which has raised questions as to whether the IRA funding
for those programs should be kept separate or be rolled in with Farm Bill conservation funding targets.

The Conservation Reserve Program (CRP), which has been the cornerstone of USDA conservation
efforts since the late 1980’s, received only limited attention during the Listening Session. Almost no one
was calling for any increases in the current maximum CRP level of 27 million acres in the current Farm
Bill. Most groups would like to see the CRP program continue to target the most environmentally
sensitive land. There was some support for having managed CRP lands that can be used for some haying
and grazing and other targeted efforts to enhance carbon sequestration. Some presenters expressed
concern that CRP rental rates are unfairly competing with ongoing cropland cash rental rates in some
areas, thus encouraging landowners to put farmland into CRP rather than renting crop land to younger
farm operators.

 Support for Beginning Farmers – There was a lot of discussion regarding more added support through
USDA for new and beginning farmers, whether it be through the direct and guaranteed Farm Service
Agency (FSA) loans or through incentives in the federal crop insurance and commodity programs. The
need to increase maximum loan amounts for beginning farmers in the FSA direct and guaranteed loan
programs was expressed frequently by those that made comments.

 SNAP Program – Several leaders of local food banks and food shelves commented on the significance
of the Nutrition Title of the Farm Bill, which funds the Supplemental Nutrition Assistance Program
(SNAP) program to assist qualifying families with their food needs. Several farm leaders also pointed
out the importance of the Nutrition Title as part of a comprehensive Farm Bill. The Nutrition Title will
account for over 80 percent of the funds expended under the next Farm Bill. For many decades Farm
Bills have contained both the Commodity and Nutrition Titles. Experienced ag policy experts warn that
efforts to separate farm programs from the Nutrition Title may make passing a Farm Bill very difficult.

 Ag Research – There were also comments at the Listening Session on enhancing support for agriculture
research and extension programs through the Land-Grant University system and at local Soil and Water
Conservation Districts (SWCD’s), especially related to the so-called “climate-smart” agricultural
practices.

One overriding theme for farm organizations at the Listening Session seemed to be the importance of
maintaining strong “safety net’ programs for crop and livestock producers through federal crop insurance and
the crop and livestock commodity programs. The other overriding issues with farm families and rural residents
were protecting our environment through conservation programs and having access to affordable and nutritious
food choices. There are a total of twelve titles in the current Farm Bill, which includes Trade, Energy, Rural
Development and Forestry, in addition to the titles and programs that were mentioned. The U.S. House and
Senate, together with the Biden Administration, will now need to find a balance between the many needs and
priorities for the next Farm Bill and the growing Federal budget deficit, in order to finalize a new Farm bill in a
timely fashion.

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Note --- For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President,
MinnStar Bank, Lake Crystal, MN. (Phone --- (507) 381-7960)
E-mail --- kent.thiesse@minnstarbank.com) Web Site --- http://www.minnstarbank.com/