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House Agriculture Chairman Mike Conaway (Agri-Pulse Communications)

New farm bill tweaks commodity title, overhauls conservation

House Agriculture Chairman Mike Conaway on April 12 kicked off a battle over the next farm bill by releasing draft legislation that would make some improvements to major commodity programs, while overhauling conservation policy and making sweeping reforms to nutrition assistance. 

The nutrition provisions, which would expand work requirements for the Supplemental Nutrition Assistance Program, led to an unusually bitter and partisan impasse that forced Conaway to delay planned committee action on the bill in March.

Conaway, R-Texas, said the bill will be numbered H.R. 2, reflecting the importance of the bill to the GOP leadership. Low bill numbers are reserved for major legislation. The tax bill enacted in December was H.R. 1. 

“The farm bill keeps faith with our nation’s farmers and ranchers through the current agriculture recession by providing certainty and helping producers manage the enormous risks that are inherent in agriculture," said Conaway. "The farm bill also remains faithful to the American taxpayer and consumer."

The bill would preserve the structure of the 2014 farm bill’s commodity title largely intact, while allowing farmers to choose whether to switch from the Agriculture Risk Coverage to the Price Loss Coverage program, which is expected to be far more popular in coming years. 

The bill also would modify PLC to raise reference prices should commodity prices rise significantly. PLC payments are triggered when market prices fall below the reference levels. Under the bill, the reference price for a commodity would be raised when the five-year moving average of market prices rises more than 15 percent above the reference level.

Soybeans are the commodity most likely to be affected, but some feed grains also could benefit in future years, according to committee staff. 

In addition, farmers who were affected by severe drought (D4, the highest ranking) for at least 20 consecutive weeks from 2008 to 2012 would be allowed to update their PLC yield histories based on their 2013-2017 yields. Yields in the current program were set based on 2008-2012 data. An estimated 400 counties would qualify for the update. 

ARC would be modified to reduce disparities in payments in different regions of the country. Coverage would be based on the Risk Management Agency’s yield data and commodity revenue would be separately calculated for drylands and irrigated acreage. ARC coverage also would be based on the county where a farm is physically located. 

The bill “strengthens the farm safety net to help farmers and ranchers weather a five-year recession, depressed prices and a 52-percent drop in net farm income,” according to a summary prepared by committee Republicans. 

Dairy producers’ Margin Protection Program, which was expanded in the budget agreement that Congress passed in March, would see additional changes sought by the committee’s ranking Democrat, Collin Peterson, to increase the prospect of payments. 

Top coverage levels for the first 5 million pounds of production would increase to $9 per hundredweight, up from the current $8 limit. To offset the cost of increasing the coverage levels, premiums would be restored at the $4.50 and $5 levels. Fees for those levels were abolished by the budget agreement. 

Peterson, who is now opposed to the bill because of the nutrition title, introduced the MPP changes in a separate bill this week, even though Conaway has left the provisions in his draft. 

Here are highlights from other sections of the bill: 

Conservation: The bill would make major, and widely anticipated, changes to conservation programs by folding the Conservation Stewardship Program into the Environmental Quality Incentives Program and increasing the cap on the Conservation Reserve Program from 24 million acres to 29 million acres. 

The increase in CRP acreage, also sought by Peterson, would be paid for by capping payments at 80 percent of county rental rates and reducing other assistance to contract holders. 

The changes to conservation will have numerous critics - the grain industry is strongly opposed to expanding CRP, for example - but the partisan fight over the bill’s nutrition title will swamp any battles over other sections of the bill. 

The bill would fund the EQIP at $3 billion a year. EQIP and CSP are expected to cost a combined $3.1 billion in 2019. 

Under current law, EQIP provides cost-share assistance for new equipment and practices, while CSP provides long-term incentive payments for improved practices. The bill would simplify qualifications for the incentive payments, which would be provided to farmers who address local natural resource concerns. Up to three natural resources concerns could be identified within a region of a state.

Existing CSP contracts would be allowed to continue to their expiration.

The bill also would provide $250 million a year for the Regional Conservation Partnership Program, $500 million a year for the Agricultural Conservation Easement Program and $100 million annually for the Small Watershed Rehabilitation Program. 

A new pilot program in the bill’s conservation title would provide $100 million to control feral swine. 

Crop insurance: The bill extends for 10 years a higher premium subsidy for beginning farmers who purchase whole farm insurance. 

USDA's Risk Management Agency is told to prioritize the development of better insurance coverage for hurricane damage.  Citrus growers in Florida have complained that existing revenue policies aren't worth the cost because of inadequate yield coverage levels. 

Animal health: To address concerns of the livestock industry, the bill fully funds a foot and mouth vaccine bank though only for one year. The vaccine bank is part of the bill’s new Animal Disease Response Preparedness and Response Program, a $450 million outlay over the five-year bill. The program is modeled after the Plant Pest and Disease Management and Disaster Prevention Program already in place. 

The bill authorizes the $150 million sought by the industry for the FMD vaccine bank, $30 million for the National Animal Health Laboratory Network, and $70 million for the National Animal Disease Preparedness and Response Program for a total $250 investment. In the following years, however, the funding drops to an annual $50 million, with $30 million for the National Animal Disease Preparedness and Response Program and $20 million for any of the three components at USDA’s discretion.

The vaccine bank – which the industry wanted to see funded at $150 million for every year  - is also designated as a U.S.-only vaccine bank, a possible point of differentiation between the vaccine bank already in place shared with Canada and Mexico.

Regulatory relief. The bill includes provisions that the committee says would clarify the “role of state lead agencies in promulgating pesticide regulations” and streamline reviews of potential pesticide impacts on endangered species. 

Research: Increases funding for the Organic Agriculture Research and Extension Initiative, which was funded at $20 million a year in the 2014 farm bill. The bill would provide no new funding for the Foundation for Food and Agriculture Research, which was established with $200 million in the 2014 farm bill. 

The bill also seeks to streamline the reporting and planning process for formula funding provided to land-grant universities. 

Specialty Crops: Maintains funding at $85 million per year for Specialty Crop Block Grants. The bill also provides full funding for the Specialty Crops Research Initiative, including set-asides for citrus research and extension.

Trade: The bill would combine USDA’s trade programs, including the Market Access Program and Foreign Market Development program under a new International Market Development Program funded at $255 million per year. The bill would guarantee $200 million in annual funding for MAP and no less than $34.5 million for FMD, $10 million for the Emerging Markets Program and $9 million for Technical Assistance for Specialty Crops Program.

All but MAP would have no funding after this year. Combining the programs is intended to ensure that the Congressional Budget Office would consider all of the programs to have permanent funding baseline. 

CLICK HERE for the text of the Agriculture and Nutrition Act of 2018.

CLICK HERE for the section-by-section summary of the Agriculture and Nutrition Act of 2018.

Spencer Chase contributed to this report. 

For more news, go to www.Agri-Pulse.com.

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