Doud: Farm Bill Now on Uncertain Timeline
Published: Friday, October 13, 2023
With the U.S. House of Representatives currently lacking a speaker, farmers may be wondering what Congress will do to advance a new farm bill by year's end.
The current five-year farm law expired Sept. 30, and while most programs are funded through the end of 2023, two observers, Gregg Doud and Pete Kappelman, say Congress will be hard-pressed to get anything done this year. Speaking at the World Dairy Expo in Madison, Wis. last week, the insiders told farmers to expect an extension of the current farm bill.
"You're not going to get it done this year," said Doud, incoming president and CEO of the National Milk Producers Federation, referring to prospects for farm bill passage in 2023. "That's just not possible, particularly considering you don't have a speaker of the House."
In a surprising event, former House Speaker Kevin McCarthy (R-Calif.) was voted out of his leadership role last Tuesday. Prior to his ouster, McCarthy had pledged to pass a new farm bill as soon as it was ready.
Doud said it's impossible to predict a timeline for farm bill passage due to the uncertainty in the U.S. House. Even an extension of the 2018 Farm Bill shouldn't be considered a "layup," he said.
"We need to know who the next speaker of the House of Representatives is," Doud said, "and the first question we in agriculture should ask the new speaker is, 'Will you please make the farm bill a big priority to get done, ASAP? And we have to know what the answer to that (question) is.'"
Kappelman, senior vice president of government relations with Land O'Lakes, echoed the same sentiment. Looking ahead to 2024, he questioned whether Congress will be able to pass any farm legislation during a presidential election year.
With all of that said, the speaker-less Congress isn't necessarily sitting on its hands and letting the clock tick.
Doud, who was the former chief ag negotiator with the U.S. Trade Representative's office in the Trump administration, said staff members with both the House and Senate ag committees are busy deleting and inserting new language into their respective drafts. After each draft is finished, it is reviewed by attorneys and then submitted to the Congressional Budget Office. Doud said that back-and-forth process is taking longer than usual.
He said we're nearing the point when Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.) and House Ag Committee Chairman G.T. Thompson (R-Pa.) will present their respective drafts for everyone to review.
"We are just a couple of weeks away from that critical step in the process," Doud said. "Then, it is going to be really interesting to see what the other members say and react and do as their personal priorities and regional preferences all come to pass here."
According to Doud, most House Ag Committee members have never been through a farm bill markup.
Doud said he worked on the 2014 Farm Bill while he was a committee staffer for then-Sen. Pat Roberts (R-Kan.). He essentially authored the sections covering trade and livestock. That bill included the Margin Protection Program for dairy farmers.
Congress tweaked the Margin Protection Program in the 2018 Farm Bill, and that's when it was renamed the Dairy Margin Coverage (DMC) program. Kappelman said DMC provides producers with better risk management protection.
This year, 17,000 U.S. dairy producers have signed up for DMC, representing 60% of U.S. dairy farms.
Through July, the program had paid out $1.1 billion, or an average of $66,000 per producer.
"The risk management piece is working," Kappelman said.
The DMC program provides coverage for the first 5 million pounds of milk marketed. After that, milk producers can purchase additional protection through two programs administered by the U.S. Department of Agriculture's Risk Management Agency, the Dairy Revenue Protection program and the Livestock Gross Margin Insurance program.
"So, I would say for dairy producers, coming off of 2018, we made some really good strides through the years and in 2018 got something pretty close to what we wanted," Kappelman said.
Doud said the only change NMPF wants for the 2024 Farm Bill is to update the reference period for pricing. The current reference period is from 2011-2013, and NMPF would like to use 2019, he said.
The farm bill represents a 10-year, $1.5 trillion investment by the federal government in U.S. food and agriculture programs. Most of that money, 81.1%, or $1.2 trillion, supports the Supplemental Nutrition Assistance Program (SNAP).
Crop Insurance, Commodity Programs and Conservation titles represent 6.7% ($101 billion), 4.5% ($70 billion) and 4% ($60 billion), respectively, of total farm bill spending, while Research, Trade, Energy and all other farm bill programs, combined, comprise just 1.3%, or less than $2 billion, of the budget.
If the 2024 Farm Bill were a pie, the size won't change much from 2018, but it could be sliced differently. According to Doud, don't expect the biggest slice, SNAP, to get any thinner. Any new revenue will have to come from other slices of the pie. He said it's like robbing Peter to pay Paul.
But there is one possible source of new funding for dairy farmers, according to Doud.
The Inflation Reduction Act of 2022 has $34.7 billion dollars for conservation spending, specifically climate issues. While the money could be used for agriculture programs in the farm bill, Doud said the funds are available only through 2026. Another complicating factor is that Stabenow and Ranking Member John Boozman (R-Ark.) have differing views on how that money should be spent.
If the two sides can agree and the money folded into the farm bill's Conservation Title, then, according to Kappelman, the funds could be used to help the dairy industry meet its Net Zero Initiative by 2050.
"Farmers can use matching dollars through conservation to help us get there," Kappelman said. "By the way, there are dollars coming back through carbon credits to producers, and there are opportunities all the way from the soil to feeding the cows and how you feed the cows."
Doud, who is currently serving as NMPF's chief operating officer until the current president and CEO, Jim Mulhern, steps down, said the $34.7 billion from the Inflation Reduction Act is the "only money we have to play with. Everything else has to stay flat."
He said there is a need for increased funding in Export Market Development Funds and agricultural research. Export promotions have a positive net return in the neighborhood of 20 to 1, Doud said, yet taxpayer support has been flat for the past 16 years.
Ag research is a popular target for those wanting to take money for other programs. However, Doud said that's like "drinking your rent money." The Research Title is a "forward-looking" part of the farm bill.
"If you don't invest in research, it's going to cost you," he said.
Kappelman said the U.S., which is famous for being the breadbasket of the world, is being outspent by other countries like China and Brazil in terms of ag research.
"We're taking a back seat there and you can't lead from the back seat," he said.
The Veteran lobbyist doesn't expect to see a push to separate the Nutrition Title from Commodities and other farm spending—and that's a good thing. He said he has shared the farm bill "gospel" with congressman from the New York City, Los Angeles and Chicago, among other places. His message: food security is national security.
He encourages farmers to speak up and tell their congressman what they would like to see in the upcoming farm bill. He said elected representatives want to hear from the 1% of the population that feeds the other 99%.
"The number of producers and the number of farmers in the farm community keeps getting smaller, so our voice has to get louder," he said.
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