Safety net mostly intact in new farm bill, Peterson says
MOORHEAD, Minn. — Rep. Collin Peterson, D-Minn., says the farm bill is "marginally better" than the 2014 farm bill but says he's worried it won't be a strong enough safety net with current low commodity prices and trade upsets.
Peterson, the ranking Democrat on the House Agriculture Committee, met with farmers and supporters in the district after the apparent agreement within the conference committee to pass a farm bill. The bill awaits conferees signing a conference report, Congressional Budget Office scoring, and then ratifying votes in the House and Senate.
"We have an agreement," he said, describing the machinations. "Right up to the end it was not a done deal."
Peterson explained that the hiccup was how to use $2.5 billion over the 10-year life of the bill when a "cushion of credit" provision was discovered and stopped. The provision, in place since 1987, allowed the Rural Electrification Administration to put money into a fund to make payments on their Rural Utilities Service loans. The change in interest rates since the provision was established 30 years ago had allowed the agency to effectively "arbitrage" the difference.
Peterson said Senate Agriculture Chairman Pat Roberts, R-Kans., had saved the $2.5 billion REA money but had allowed ranking Democrat Sen. Debbie Stabenow, D-Mich., to dole out the money for favorite projects among Democratic senators.
"All the things the Senators wanted, she was able to fund, because Roberts gave her the money," Peterson said. House Agriculture Chairman Mike Conaway, R-Texas, insisted the saved money must be split with the House.
Will it be enough?
Peterson said there are improvements in the bill, but he fears it won't be enough considering low commodity prices and damaged trade relationships in the wake of tariffs imposed by the Trump administration.
He'd urged removal of Republican-backed changes in the Supplemental Nutrition Assistance Program, retaining some urban votes.
"The Republicans have accomplished what I have not been able to do, and that's making me a hero amongst the Democrats," Peterson said. "Because I stared them down on SNAP."
Peterson said dairy "got the best part of the deal, and they needed it," as he hoped to stem the loss of dairy farms due to low milk prices. Peterson said "smaller" farms that produce less than 5 million pounds of milk a year (roughly operations of fewer than 240 cows) are very likely to be able to make money under the 10-year life of the bill. That category only produces 15 percent of the milk in the U.S., he said.
"Under what we have put in the bill, you will not be able to lose money, unless you really try," Peterson said.
Similarly, Peterson touted an increase in the sugar loan program by about 5 percent, from the current 23 cents a pound for beet sugar. That allows companies like American Crystal Sugar Co., in Moorhead, a way to take a loan on sugar to reduce their other borrowing costs.
"It's a big deal," he said, noting the loans doesn't score highly as a subsidy and are typically repaid. "But it does work as a price support."
Peterson noted that he was pleased with the Red River Valley sugar producers' support in his re-election and said he had less apparent support east of U.S. Highway 59, where dairy farmers would be.
Peterson said the bill also:
• Increases the Conservation Reserve Program by 3 million acres but reforms how it works. "You will not be able to afford to put good land in the CRP," Peterson said. Payments will be a "market-based approach — capping payments at 90 percent of the county rental rates for the continuous signup and at 85 percent for the general signup, which will occur every year. "We've already heard some squealing about that ... because people got used to getting paid twice as much as the rental rate for CRP, and it has to stop," Peterson said. He said the reason is there have been "all of these boutique programs that require $500-per-acre seed, and they claim they need all this money because they're spending money on it." He would get rid of pollinator habitat seed, which has produced weed patches. "If I had my way we'd have alfalfa and brome grass" for the CRP plantings, Peterson said.
• Increases the loan rate by about 15 percent for corn, at $2.20 per bushel, and barley to $2.50 per bushel. He said he was alone in the conference committee. "It gives farmers a little bit of extra money for nine months," while the grain is under loan.
• The Agricultural Risk Coverage and Price Loss Coverage will change. ARC and PLC programs will allow updates of how yield figures are figured, based on Risk Management, or crop insurance, figures instead of National Agricultural Statistics Service yields based on surveys. After 2021, farmers will be able to switch back and forth between ARC and PLC, if they want.
• Farm Service Agency direct loan limits have been raised to $600,000, up from $300,000. FSA loan guarantees have been increased to $1.75 million from $1.25 million.
• Peterson included a provision to require land in wetland easements to be open to the public if the annual payments to the landowner are more than 90 percent of the value of the land being placed in an easement. Peterson announced he'd hired Grant Herfindahl of Benson, Minn., a former state director of the Farm Service Agency, to help deal with constituents on federal wetland policies and rules.