SHORT TERM BUDGET AGREEMENT MUST NOT STALL NEGOTIATION OF THE NATION’S NEXT FARM BILL!
Richard Blau
Chair, Alcohol Beverage & Food Law Department at Gray Robinson; Chambers USA Nationwide Band 1 for Alcohol Law
By passing a third budget extension in the eleventh hour, Congress yet again has avoided what would have been a costly and fiscally irresponsible federal government shutdown.? But these temporary compromises just kick the can down the road for another few weeks.?
For America’s farmers, ranchers, dairy operators and foresters, as well as the country’s rural communities and consumers nationwide, the latest temporary funding measure must not be allowed to further delay making any progress on a new and much-needed Farm Bill.
Especially for America’s children, the consequences of further delays to negotiating a reasonable and balanced Farm Bill could be devastating.
WHY THE MUCH NEEDED FARM BILL IS DELAYED
The 2018 Farm Bill officially expired on September 30, 2023, the end of the federal government’s previous fiscal year. At that time, Congress was negotiating a last-minute continuing resolution to avoid a federal government shutdown. That budget compromise funded government agencies, but only through mid-November of 2023. That continuing resolution agreement included two budget deadlines: Funding for four appropriations packages, including agriculture, would continue, but only until January 19, 2024; the remaining appropriations packages would remain funded through February 2, 2024.
Hard-right Republicans opposed to the budget compromise responded to what they described as a “bail-out” by ousting House Speaker Kevin McCarthy. After a month of bitter infighting, the Republican Caucus ultimately elected Louisiana Representative Mike Johnson to be the new House Speaker. At the time, Speaker Johnson announced his intention to bring new Farm Bill legislation to the floor of the House by December of 2023.
A few weeks later, facing yet another funding extension deadline, Democrats in the House and Speaker Johnson brokered a second compromise to keep federal government agencies open and operating into 2024. As part of that compromise, the 2018 Farm Bill was resuscitated, but only extended until September 30, 2024.
WHY A NEW FARM BILL IS NEEDED ASAP
Lawmakers must rewrite the comprehensive Farm Bill every five years to set both policy and funding levels for farm, food and conservation programs. The 2018 Farm Bill received a one-year reprieve through the latest temporary budget extension, but that froze programs and spending levels at their 2023 levels despite significant changes affecting these programs and those who rely on them.?
From a budgetary perspective, many Farm Bill programs that receive mandatory funding are assumed to continue beyond the end of their authorization; they have a continuing baseline beyond the end of a farm bill, which gives them built-in future funding if Congress decides that the programs are to continue. If the programs are not continued, the baseline can be reallocated or used as an offset for deficit reduction. Examples of programs receiving some level of mandatory federal spending on a baseline include those administered by the federal Commodity Credit Corporation (“CCC”), including the Price Loss Coverage program, the Marketing Loan program, the Dairy Support program, ?and the Agriculture Risk Coverage-County program. These are price-support and loan programs that form an “ag-safety-net” for America’s farmers, ranchers, dairy operators and foresters.
Other programs in the Farm Bill are without baseline mandatory funding, e.g., certain agricultural research and scholarship programs, conservation and public access to habitats programs, and bioenergy/biofuel development programs, If farm bill programs without a baseline are continued, reauthorizing would then result in a positive score (cost) and would need to be offset by reductions elsewhere for the bill to remain budget neutral.? Currently, twenty-one programs across eight of the twelve titles of the renewed 2018 Farm Bill do not have a baseline, according to a recent nonpartisan Congressional Research Service analysis.
The House and Senate Agriculture Committees have been working over the past year to receive input for drafting the new Farm Bill, with dozens of Capitol Hill hearings, field hearings, community listening sessions and committee staff meetings in each chamber. Many agriculture trade associations and farmer/rancher advocates have emphasized the need for expanding the ag-safety net.
?However, with broader budget negotiations and emergency spending authorizations commanding Congress’ attention, lawmakers have yet to circulate a draft Farm Bill at the committee level.? In fact, both Senate and House staffers have publicly stated that they are still divided on some of the largest appropriations required for any new legislation, including the core ag-safety net of payments to programs for farmers, dairy operators, foresters and ranchers.? Indicative of the challenges ahead, the Ag Committees do not even have enough consensus on potential changes to ask for a “score” from the Congressional Budget Office — the process of seeing how much different proposals would cost over the course of the Farm Bill’s implementation.
CASE IN POINT: THE IMPACT ON CROP SUBSIDIES
Because?President Biden signed?into law H.R. 6363, the?Further Continuing Appropriations and Other Extensions Act, 2024?(Pub. L. 118-22),?which extended the?Agriculture Improvement Act of 2018?(Pub. L. 115-334), more commonly known as the 2018 Farm Bill, agricultural producers can continue to enroll in the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC)?programs administered by the USDA’s Farm Service Agency’s (FSA)?for the 2024 crop year. The current deadline to complete enrollment and elect any changes in protection is set for March 15, 2024.? However, that extension only lasts through the current federal fiscal year (September 30, 2024).?? ?
Agricultural producers hit hard by rising production costs are advocating for a significant expansion in funding for ag-safety net programs. But November’s continuing authorization legislation does not deliver the increased levels of protection desired by the agricultural community.
Case in Point: Delaying agreement on a new Farm Bill jeopardizes farmers facing rising input costs for things like fertilizer and fuel, along with the possibility of lower crop prices.? Title One of the Farm Bill typically provides crop subsidies.
Agriculture advocates contend there is a real need for Congress to fund a meaningful increase in reference prices, i.e., the amount at which the government will step in and help farmers with federal subsidies. But continuing delays in negotiating a new Farm Bill extend uncertainty to the ag-sector, which in turn impacts the ability of farmers, ranchers and other ag-producers ?to effectively undertake necessary planning for the net production cycle.
ANOTHER CASE IN POINT: THE IMPACT ON WIC
Nor are agricultural producers the only ones impacted by delays to the successful negotiation of a new five-year Farm Bill.? Many Farm Bill programs are designed to benefit ag-producers by directly supporting consumers of those producers’ products, i.e, fruits, vegetables, grains, dairy, eggs, meat, and wood products. Failing to fund these programs can have far reaching negative consequences for ag-producers, rural communities, and consumers nationwide.
Case in Point: The latest continuing resolution does not include?any additional funding for the Special Supplemental Nutrition Program for Women, Children and Infants, commonly known as "WIC." ?Since 1997, WIC has received consistent federal funding from lawmakers on both sides of the aisle. Even during periods of gridlock, members of Congress have always been able to put aside their partisan differences when it comes to funding nutritional benefits for low-income women and children.
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The U.S. Department of Agriculture estimates that 53% of all infants in America receive some form of WIC assistance.? However, unlike federal entitlement programs which are required by law to assist all eligible individuals, Congress sets WIC’s funding on an annual basis.?
The November temporary budget extension deal lawmakers brokered to avoid a government shutdown keeps WIC funding at Fiscal Year 2023 levels, which does not account for the fact that the program now has approximately 400,000 more participants than it did a year ago as food prices increased substantially due to economic inflation. Today, approximately 6.7 million people currently receive WIC benefits; more than half of them are children.?
THAT is a serious problem.? Congress has directed USDA and states to continue serving all eligible recipients, but lawmakers have not authorized additional funding to cover the program once the FY2023-level funding runs out. If funding levels are not raised to meet the growing number of recipients, the program will incur a $1 billion shortfall before the end of the federal government’s current fiscal year.
Bottom Line: Two million parents and young children could be turned away from the program by September of 2024, according to the?Center on Budget and Policy Priorities. If that happens, women and children will likely be put on waiting lists for the first time in over 25 years, according to the USDA.
HOW TO MOVE FORWARD
Congress is legally required to pass a full five-year Farm Bill to give farmers, ranchers, dairy operators, foresters and other ag-producers, as well as America’s families and rural communities, the certainty and support they need to maintain a livelihood and keep America food-secure.?
All four leaders of the Senate and House Agriculture Committees have committed to moving forward expeditiously. In a joint statement issued after passage of the continuing budget resolution, Senate Chairwoman Debbie Stabenow (D-MI), Senate Ranking Member John Boozman (R-AR), House Chairman Glen Thompson (R-TX) and Ranking Member David Scott (D-GA) emphasized that funding America’s agricultural needs required more than just kicking the can down the road:
“As negotiations on funding?the government progress, we were able to come together to avoid a lapse in funding for critical agricultural programs and provide certainty to producers. This extension is in no way a substitute for passing a 5-year Farm Bill and we remain committed to working?together to get it done next year.”
How that will play out remains to be seen. Lawmakers’ negotiations are concentrated on three areas of spending:
WIC’s federal funding shortfall presents states with difficult decisions about how to manage the program. Many states would likely implement waiting lists for applicants to reduce costs. Under program rules, waiting lists would be implemented first for non-breastfeeding postpartum women, next for children ages 1 to 5 years old who do not have higher-risk medical issues, and then for pregnant and breastfeeding women and infants who do not have higher-risk medical issues. However, given the size of the funding shortfall, it is likely that waiting lists would stretch across?all?participant categories, affecting both new applicants and mothers, babies, and young children enrolled in the program who are up for renewal of benefits.
Cutting off access to WIC for pregnant women, new mothers, and infants and children would have severe and harmful consequences.?Research?shows the critical role that WIC plays in supporting maternal health and child development. WIC participation during pregnancy is associated with lower risk of preterm birth, lower risk of low birth weight, and lower risk of infant mortality. Children on WIC are also more likely to consume a healthier diet, and this impact grows the longer a child stays on WIC.? Moreover, USDA’s Economic Research Service recently found that household food?insecurity increased?last year, at a time when significant safety net enhancements that helped people through the worst of the pandemic began to end, and the enhanced Child Tax Credit enacted in the American Rescue Plan expired. More than half of food insecure families reported gaining assistance through federal nutrition programs like WIC to make ends meet—an indication of how important the programs are in helping to support families, and what is at risk if Congress cuts or underfunds them. To avoid these consequences, a new Farm Bill should provide the additional $1 billion needed to adequately fund the WIC program.
Likewise, The Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the Food Stamp Program, is the nation’s most important anti-hunger program. Proposals from Republicans to make changes beyond the work requirement increases under the?Fiscal Responsibility Act of 2023?are at odds with Democrats’ preferences for increased SNAP.?Data demonstrate that the greatest shortcoming of SNAP is that benefits for most households are not enough to get through the entire month without hunger or being forced to sacrifice nutrition quality. This limitation persists even in the face of overwhelming evidence on the gains from more adequate monthly SNAP benefits. To improve the SNAP program’s effectiveness for fighting food insecurity, while improving ?nutrition, health, and child development, lawmakers negotiating the new Farm Bill will need to address the following actions to improve SNAP benefit adequacy: (i) replace the Thrifty Food Plan with the more appropriate Low-Cost Food plan as the basis for SNAP benefits; (ii) eliminate the cap on the SNAP Excess Shelter Costs Deduction; (iii) raise the minimum SNAP benefit; and (iv) authorize a SNAP Standard Excess Medical Deduction for persons who are elderly or have disabilities.
But many of these same legislators decry the increasing federal deficit, and resist increasing access to commodity supports through increased federal spending.? Instead, some fiscal hawks have proposed shifting up to $18 billion that was earmarked for conservation and ag-related climate mitigation (in the 2022 climate, healthcare, and tax law) into crop subsidies.
Senate Ag Committee Chairwoman Debbie Stabenow has been adamant about protecting critically needed conservation funding for farmers, ranchers, dairy operators and foresters. Hence the logjam.? Because of significant climate-related funding already enacted as part of the?Inflation Reduction Act, legislators will have to decide whether to leave IRA climate funding separate from the Farm Bill’s conservation programs or to combine it with the Farm Bill.
But Senate Agriculture Committee members also have expressed concerns that A.I.’s potential to bring more advances in agriculture comes with risks.? Identified concerns include (i) farm data security; (ii) the affordability of technology, particularly for small farms; (iii) predatory consolidation in the Ag-Tech sector; and (iv) other, unforeseen consequences that are evolving as quickly as the technologies themselves.
Working through these and several other complex policy considerations will not be easy, which is why there is no time left for Congress to spare in hammering out the details to a new, five-year spending plan for sustaining American agriculture.? A reasonably negotiated new Farm Bill can deliver needed support for rural America by advancing food security and conservation initiatives while aiding America’s transition to a clean energy economy, and even protecting ag-workers and fighting the negative effects of climate change.?
To arrive at the right balance of programs and funding, it is important that everybody -- farmers, ranchers, dairy operators, foresters, rural communities and consumers all speak up.? Let your elected representatives know your priorities, and emphasize the importance of producing a reasonable, bi-partisan Farm Bill sooner rather than later.