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USDA catching up on farm bill implementation after government shutdown

ORLANDO, Fla. — The U.S. Department of Agriculture's Farm Service Agency is fully focused on implementation of the 2018 farm bill but is playing catch-up after the 35-day government shutdown.

"Does that mean that to get to implementation we'll be 35-days behind? I would say absolutely not," Farm Service Agency Administrator Richard Fordyce says. "That will kind of scrunch up our timeline a little bit, compress it. But we should be in good shape from an implementation standpoint."

Fordyce, speaking at the Commodity Classic in Orlando, says FSA had done some preliminary work and crafted draft language even before the president signed the bill into law, which has streamlined the process. The agency is currently working to answer a matrix of questions like "What is the definition of a beginning farmer?" Depending on the question, he says it may get answered by the deputy administrators all the way up to the secretary.

USDA will have far less money to implement this farm bill than they did with previous bills.

"Congress has given us $15.5 million to implement this farm bill, which sounds like a lot of money, but the last farm bill we had I'm told $100 million," says Bill Beam, Farm Service Agency deputy administrator for farm programs.

He says they don't have as many program changes as in some past bills, but with the constant updates on software and training, the budget will be tight and they will be looking for some additional dollars.

Beam says the dairy program will be the first to be rolled out. Secretary of Agriculture Sonny Perdue has announced June 17 as the date signup will start. "The payments will come out some time after that," he says.

USDA is excited about the changes that have been made to the dairy farm safety net in the new farm bill. Beam says it is a big improvement.

"The premiums are going to change and the payment structure is going to change as you can increase the coverage," he says.

The new Dairy Margin Coverage Program will guarantee farmers receive a $9.50 spread between input costs and the price of milk on their first 5 million pounds of milk. The program will be retroactive to Jan. 1, 2019.

Beam says dairy farmers paid premiums into the Margin Protection Program, but many never received any payments. So, there's a provision in this farm bill to fix that.

"The difference between what they received and what they paid in premiums, they can get 50 percent of that back in a cash payment," Beam says.

If farmers chose the DMC Program, they will have greatly reduced premiums and expanded coverage for farms of all sizes.

"If they elect to go with the new coverage, they can get 75 percent of the difference between what they paid in premium and what they receive back and put that towards the premium," Beam says.

The 2018 Farm Bill made some changes to how two protection programs set up in the 2014 farm bill work.

Under the Agriculture Risk Coverage-County, or ARC-CO, program, payments are issued when the actual county crop revenue of a covered commodity is less than the ARC-CO guarantee for the covered commodity. In a significant modification made in the 2018 Farm Bill, yields to determine payments for ARC-CO now will be based on Risk Management Agency data instead of data from the National Ag Statistics Service.

"Farmers felt like maybe the RMA data gave them a more accurate, shall we say, report on what was actually happening out there in their counties," Beam says.

If there is no data from RMA, USDA will still use NASS information. Beam admits there have been disparities in payments where one county got a payment and the county right next to it did not.

"This will not necessarily fix that problem but hopefully it gives us a more accurate reading of what's actually happening in those counties," he says.

Instead of ARC-CO, farmers can choose the Payment Loss Coverage, or PLC, program. PLC program payments are issued when the effective price of a covered commodity is less than the respective reference price for that commodity. The effective price equals the higher of the market year average price or the national average loan rate for the covered commodity.

Under the 2014 Farm Bill, farmers had to lock in whether they wanted to use ARC-CO or PLC for the duration of the farm bill. The 2018 bill changed that. For 2019 and 2020, farmers will make one election to cover those years.

"But then after that, and this is a new provision for this farm bill, you will be able to make that election every year," Beam says.

Conservation programs also saw some changes, with the main difference being the cap on Conservation Reserve Program acres being raised 3 million acres, to 27 million acres by 2023.

"There's some decisions around CRP and what are going to be priorities. Some of that was prescriptive in the legislation as far as the number of acres that would be devoted to continuous, the number of acres that would be devoted to grasslands," Fordyce says.