Ag committees begin work on new farm bill

Sioux Falls, SD - The House and Senate Agriculture Committees have started the process of writing a new farm bill.

The Senate Agriculture Committee held its first farm bill field hearing Feb. 23 at Kansas State University in Manhattan, Kan. Farmers testifying at the hearing talked about what they think is working and what is not from the 2014 legislation. They also emphasized the need for funding levels to be maintained or increased in the 2018 farm bill due to lower grain prices and net farm income.

Sen. John Thune, R-S.D., serves on the committee. He says members aren't looking at wholesale changes in the new farm legislation, but they have identified some areas that need tweaking. The goal for lawmakers is to protect farmers facing low commodity prices.

"The commodity title of the bill is really important and making sure we've got a safety net that works," he says.

That means if the Agriculture Risk Coverage program is maintained, the payment discrepancy between counties must be fixed.

"There were differences between counties that was concerning to us, and so how some of the yields had been calculated and the formulas that went into that is something that we would, you know, definitely take a look at," says Keith Alverson, who farms near Chester, S.D., and is immediate past president of the South Dakota Corn Growers Association.

Rep. Kristi Noem, R-S.D., says she has had frequent conversations with House Ag Committee Chair Mike Conaway about changes in the next farm program with ARC topping the list.

"We're looking at the ARC program. The county-by-county yields, we're not sure that should stay. What really helps producers, those are the kind of changes we want to make to commodity programs," she says.

Thune says the safety net also includes permanent disaster programs for livestock, such as the Livestock Indemnity Program and Livestock Forage Programs.

Since 2012, western South Dakota has received over $265 million in payments under the permanent disaster title in the current farm bill, he says.

While crop insurance is not a component of the farm bill, it will be negotiated in tandem with the measure. Noem says it's a priority because it's the most important risk management tool available for grain farmers.

"We need to continue to look into making sure that we have crop insurance, that that risk management tool is there, it's secure," she says.

The committees also are looking at enhancing water quality and conservation programs.

"We need more conservation acres. We're all very disappointed in what happened in CRP here in South Dakota, but we need to prioritize that and make sure that that's fully funded," Noem says.

Thune agrees there will be more emphasis on conservation in this bill and he is offering his own program called the Soil Health and Income Protection Program or SHIPP.

"This would give producers an opportunity to take the poorest producing land that they have and put it into a program for a shorter amount of time, get rental payments on that," he says.

He says payments would be figured at half of the Conservation Reserve Program rental rate. Farmers would have to plant a perennial crop on the land, but would be able to hay and graze those acres.

Another anticipated change in the 2018 farm bill is the Margin Protection Program after many dairy producers failed to receive payments when the milk price dropped below breakeven levels. The reason is payments were based on average margins, which they say is a flawed formula that needs to be revamped or thrown out in the next program.

"That's definitely going to be reworked. Too many senators, particularly on the agriculture committee, know that their dairy farmers aren't getting anything out of the program," says Chris Clayton, DTN ag policy editor. "There may be a whole new kind of different program brought up for dairy. The problem is then how much is that new program going to cost every year?"

In fact, the big key for the entire farm bill is finding budget dollars to keep even current funding levels.

"The farm bill is a matter of robbing Peter to pay Paul, so what ends up happening there is critical," Clayton says.

Congress will be going through the process of budget reconciliation and looking for savings that will determine the baseline funding for the farm legislation.

"You know if ... the committees can actually show some way, shape or form of reduction in the cost over a 10-year period that's a more likelihood they can get a bill done," Clayton says.

The Senate Ag Committee will hold its next farm bill field hearing in Michigan this month.