Farm Bill Politics 5: #farmbillnow


The 2014 Farm Bill has been expired since October 1st. What does this mean for young farmers and ranchers and the USDA programs they rely on? This week, we catch up with Andrew Bahrenburg, our National Policy Director and guy on the ground in DC, about the effects of the expiration and fate of these so-called “stranded” programs. We also chat with USDA Economist Dr. Anne B.W. Efland about the history of the bill, and what’s at stake if a new bill isn’t passed this year.

Also, a reminder to VOTE in the midterm elections this Tuesday, November 6th. In the meantime, you can take action today by calling your Reps and telling them that young farmers need a #farmbillnow. Text “FARM BILL” to 40649.

Expiration of the 2014 Farm Bill: Some Potential Implications

 

Episode Transcript

Lindsey:                 This is the Young Farmers Podcast. I’m Lindsey Lusher Shute. On October 1st, the farm bill expires, and while some programs are extended, others are not. To find out what it all means, I spoke with USDA economist Anne Effland. Anne shares a historical context for farm bill programs and explains what’s at stake if nothing’s passed by December 31st. But first, I had to call up our guy on the ground, Andrew Barenberg in DC. Andrew and I talk about what might happen with the farm bill if the House flips over to the Democrats and the current state of negotiations.

Farmer:                  Hi, I’m Rhyston Mays, farmer of the lovely Phillies Bridge Project in New Paltz, New York, and an organizer with the Hudson Valley Young Farmers Coalition. I joined the National Young Farmers Coalition because I want beginning farmers like myself to have access to resources and a support network, as we work to become stewards of the land in our communities. We have to support each other, so for $35 a year, you can also join NYFC. By joining, you can also get discounts like 10 percent off Johnny’s selected seeds and 10 percent off hasta tools. To join, go to youngfarmers.org. Much love and reparations now.

Lindsey:                 The farm bill expired. As of October 1st, we have no current farm bill. What does that mean?

Andrew:                 Well, this has happened before. What it means depends on the program itself. So the biggest programs in the farm bill, typically your SNAP or food stamps, crop insurance, most commodity programs, and one conservation program, which we’ll get to in a second, basically are large enough that they have their own inertia and are fully or almost completely operational. That’s at least true through the rest of this calendar year. The second category are the programs that do have funding in this fiscal year, but they lack the authority to actually continue running. Then there’s a third category, and this is probably the most important for young farmers. And that’s your so-called stranded programs. Now these are smaller programs that are funded in small enough amounts, still in the millions of dollars of course. It’s all relative when we’re talking about federal spending, but that now currently have no funding, no authorization and effectively have had the lights turned off on October 1st and beyond until they are expressly funded in a new farm bill. Examples of those programs, farmer’s market promotion program, beginning farmer and rancher development, outreach and assistance to socially disadvantaged farmers, double up food bucks program that makes food stamps eligible and more effective at farmer’s markets, value-added producer grants. A lot of these programs are either directly or indirectly benefiting young and beginning farmers and those other programs that simply don’t exist in this weird non-bill limbo period.

Lindsey:                 And what is the state of negotiations right now?

Andrew:                 Well, that sort of depends on the day and who you ask. I will say this, Congress has left town for the time being until after the midterm elections. So, they’ve all left town to hit the campaign trail. However, staff for those members, the committee staff, continue to meet basically every day around the clock, to try and continue these negotiations, to move them forward, to get as many things as they can to a place where once those bigger sticking points fall into place, everything else is ready to go. Right? So, the big things of course, you know, SNAP work requirements has gotten the most attention, has been one of the biggest sticking points. But certain conservation issues, the proposed merger in the house bill between the two largest working lands, conservation programs, EQUIP and CSP, has been a major sticking point and one that we’ve engaged in on a lot. Even some commodity programs, title one, those are the big ticket items that will really only be decided by those top four members of Congress.

Lindsey:                 And after the election?

Andrew:                 And after the election, right.

Lindsey:                 And Andrew, how much does this November election, how much is that going to impact the outcome of the farm bill? So, if the house flips as of next year to Democrats, how is that going to impact negotiations?

Andrew:                 It’s kind of a guessing game, to be honest. I’d say the conventional wisdom is still that Democrats, if narrowly do take the house, I think most people are expecting a pretty status quo senate. Republicans will retain the majority there. What’s confounding that conventional wisdom a little bit is this is a really tenuous time for agriculture generally and for farmers specifically, given that commodity prices are where they are and are not expected to rebound in 2019, given that no one really knows where this trade war is going to end up, but either way, even if it were resolved tomorrow, I think would leave lasting damage on especially commodity farmers who rely on those export markets. It’s not a guarantee that a Democratic house necessarily wants to be the ones to have to rewrite an entirely new farm bill in that context. Especially when the Senate has a farm bill that was overwhelmingly bipartisan.

Lindsey:                 But do you think if the Democrats had been in the majority in writing the farm bill that they’re debating right now, do you think it would have been different?

Andrew:                 I mean obviously there’s no question the House Bill would have been a lot different, especially because before that bill was introduced, they were negotiating pretty closely and that might have looked like a more bipartisan bill, but because Republican leadership dug in pretty hard on what they wanted to do with SNAP food stamps program, that caused Democrats to basically leave the negotiating table. And so when that happens, all of the kind of bipartisan stuff just goes into the scrap heap, and then you get what looks like a much more partisan bill at that point.

Lindsey:                 Oh, so the house was taking a much more bipartisan approach before the SNAP work requirements became such a big part of the house package?

Andrew:                 Yeah. I mean, they were at least negotiating.

Lindsey:                 I was listening to some analysis last night that it’s possible that the Republicans could in fact have a wider majority in the Senate. So I guess on the Senate side, Roberts would I guess have an even more powerful negotiating position, but then he would have to take into account positions and policies led by Democrats from the house.

Andrew:                 Yeah. Um, it is not a guarantee that Democrats take the house. That’s one thing. The other is that for the most part, even if the house flips to Democrats, maybe Republicans are out of a seat or maybe not, it’s still going to be the same four people in the room negotiating, right? It’ll still be senators Roberts and Stabenow negotiating on the Senate side of the table, and it could very well be the same two house members on the house side.

Lindsey:                 And Andrew, why is it that you think the Dems in the house wouldn’t want to lead another farm bill process given the current farm crisis, the double crisis of prices being so low or net farm income being so low and the terror of situation?

Andrew:                 I think, one issue is that even if Democrats were to control every lever of power here, everyone’s more or less still working with the same budget and political climate. Right? And so, especially after the so-called Trump tax cuts that were passed this year, the federal deficit has absolutely ballooned. I think especially as things continue to get worse, I don’t think either party wants to be the ones in power to say, “sorry, we know you’re hurting, but this is as much trade aid as we could possibly give you. ”

Lindsey:                 Cause there’s not much they can do without additional financial resources.

Andrew:                 I will not say it’s impossible. It’s not as though we had money lying around to pass it a trillion dollar tax cut either. Right? So like where there’s political will, there’s always the ability to spend more money. But I just think that Democrats in control of the house facing a Republican Senate aren’t necessarily going to feel that compelled to scrap the entire farm bill that’s been negotiated up to this point and rewrite a whole new one.

Lindsey:                 Well Andrew, we will be following it and following up with you as negotiations continue and certainly after the election, to hear what people are saying about how that’s going to change the scenario. Of course, these stranded programs that are so important, that are oftentimes the programs that our members interact with the most, we’re going to be keeping close track there too. So thank you.

Andrew:                 Can’t wait.

Lindsey:                 Bye.

Andrew:                 Bye

Lindsey:                 Thanks Andrew. Now onto my conversation with Anne.

Anne:                       I’m Anne Effland and I am a senior economist in the office of the chief economist at USDA and I specialize in working on domestic policy.

Lindsey:                 And you also are a historian with USDA?

Anne:                       Well, I am a historian, an agriculture historian, and I started at USDA as a historian and have since sort of retooled as an economist, but I still do quite a bit of ag-history work. So yes.

Lindsey:                 So I’d love to just talk about the farm bill as an instrument for policy. When the Congress is passing a farm bill every five or so years, they’re actually amending previous farm bills. Can you talk about the structure of what is actually going into a farm bill and what that underlying legislation is?

Anne:                       Yeah. So the farm bill, it happens every five years. It’s sort of convention. These things can be done in different ways if there’s a desire to do that. So we have had legislation that can change farm bill provisions in the middle. For example, the end of the tobacco program came as part of some other legislation and no longer was active even though it had been authorized in the farm bill. So there’s all kinds of overlapping authorizations that happened through legislation. But the way the farm bill is set up, beginning in 1973, they created this omnibus farm legislation. Before that, there were separate laws that governed programs for different commodities and different types of programs that are now under this omnibus bill. And that’s when the food stamps came in and rural development and some others that had been dealt with separately in the past. But the commodity programs have a provision. What they do is suspend what’s called permanent law, which are provisions from the 1938 Agricultural Adjustment Act and the Agriculture Act of 1949. They cover different commodities under those acts and different programs for commodities. So those are set up as permanent law, so that if a farm bill runs out, that is for these commodity programs, it runs out at the end of that crop year. If they run out, then the permanent law kicks in.

Lindsey:                 Could you just explain this concept of permanent law?

Anne:                       It’s considered permanent law because it’s never been repealed. So it doesn’t get repealed in a farm bill. You could end; we do in cases. You just end the program. It’s been repealed; it no longer exists. And then you begin a new program. But in this case, these old programs are not repealed. They’re left on the books, and the new farm bill is written as a suspension of those laws. So as long as the new farm bill is in place, those old laws are suspended, they’re no longer active. But when the new farm bill runs out, those become the law of the land again. So the suspension ends, and those become the provisions for those programs.

Lindsey:                 So rather than like getting out a new piece of paper, they just keep scratching, keep going. Right?

Anne:                       Well, I mean, it does force a consideration of new farm policy.

Lindsey:                 Because there’s a threat that you might go back to somebody’s idea in 1938.

Anne:                       Yeah. Because if you go back to those old farm bills, they include a concept called parity based support that is essentially like a purchasing power equivalent for commodity prices. So for example, the parity based support price for milk would be $39, a hundred weight.

Lindsey:                 Some dairy farmers would probably appreciate it right now.

Anne:                       No, that’s right. That’s right. But it would be quite expensive. So these are provisions that kind of force Congress to reconsider and pass new policy every five years when the farm bill expires.

Lindsey:                 So parity-based support- could you just tell me what that program was? Why was it developed in 1938?

Anne:                       So this is essentially based in the Great Depression. Farmers in particular had essentially been in depression for 10 years by the time it hit the rest of the economy. They had had relatively high prices just before and during World War One, when there was high demand for US production. And then at the end of the war, that demand sort of dried up. So prices fell very precipitously. I mean $2 wheat down into less than a dollar and cotton down into the single cents per pound. So it was a really severe shock to the agriculture system. And so there were foreclosures, there was debt, there was credit involved in expanding to meet that demand. And then in some ways, like the 1980’s, for people who are familiar with the farm financial crisis of the 1980’s. So when the depression hit the whole country, they set up a program to address the problems in the farm economy. And what that did was, this parity price concept was, to reestablish farm prices, commodity prices, to match their value essentially in that pre-world war two period.

Lindsey:                 I see.

Anne:                       When they were relatively high. So what 100 weight of milk would have bought, I guess 09 to 14, the price would be set to purchase that same amount of inputs and household goods that you could have done in that earlier period.

Lindsey:                 And that price, I assume, is adjusted to inflation.

Anne:                       Well, I mean, what you could purchase in 1909 with 100 weight of milk, now has a value of essentially $39. So, you’d need to get $39 per hundred weight of milk to equal what that 100 weight of milk value would have purchased in that earlier period.

Lindsey:                 I see.

Anne:                       So that’s how that happens. And actually, the Department of Agriculture is required to continue to calculate those parity prices because this permanent legislation exists.

Lindsey:                 And so, this is the law, and that’s the 1938 Agricultural Adjustment Act, which I guess makes sense given parity pricing. So this is the law that would go into place if a farm bill isn’t passed by December 31st. Is that right?

Anne:                       Well, it depends on the commodity, and I think it’s highly unlikely that this would happen.

Lindsey:                 And recently, the USDA or the federal government has been also purchasing milk to respond to the tariffs.

Anne:                       Those are programs that buy commodities for the use of nutrition programs. Basically, they purchase cheese and I think they’re about to purchase some fluid milk. When prices are relatively low, it’s a good opportunity to purchase. It’s sort of a combination of keeping track of how the commodity prices are going and what nutrition programs need. So, Ag marketing service will purchase those commodities they put out. It’s not at a set base price like this. Essentially, they buy commodities at the market price and then donate them for use in nutrition programs. So it’s actually quite different from a price support program.

Lindsey:                 Now that the clock is ticking and we have an election upon us, is there a team at USDA that is sort of trying to sort all this out? Should we not have a farm bill on January 1st? I mean, the assumption is of course, yes we’re going to. But is there some requirement like someone somewhere is calculating what those prices of milk should be? Is there also some team somewhere figuring out how we do 1938 policy?

Anne:                       Well yeah, I mean the department’s legally obligated to be prepared for that, but ordinarily, if it’s not possible to get a farm bill within the needed time, there would be an extension that would continue the law as it has been. And so, it’s possible to pass a new farm bill.

Lindsey:                 And so in the 1973 omnibus farm legislation, is that when this deal was struck between the nutrition and farm programs to put it all together in one big package? I mean, I guess that was the advent of the snap program, but is that also just the moment at which all of these programs were put together?

Anne:                       Yeah. The food stamp program was actually reauthorized; it had existed for a few years during the Depression in the 1930’s, but it was brought back in 1964. But, it became part of this omnibus farm bill in 1973, and that was part of the purpose of that– was to create a piece of legislation all linked around food and farm, but to create a political coalition that would support all of the various assets.

Lindsey:                 And I know that the food stamp program was created at that time, because there was a tour of areas of the country where hunger was particularly acute, and this tour inspired law makers to come together around the SNAP program, around the food stamp program.

Anne:                       Well, these things tend to be more than one story. During the Kennedy, but especially during the Johnson administration, there was a great deal of attention to poverty. So, addressing poverty issues was a central core to the agenda of that Democratic administration, the Johnson administration. So, the food stamps was part of that. It was one of the component pieces of addressing poverty in multiple ways. I don’t know specifically, but this tour that you’re talking about, it may well be the case and I haven’t read the specific history. I’ve looked at it from other angles.

Lindsey:                 I just wonder, was hunger actually worse in that moment or was there more attention brought to it?

Anne:                       Oh, well, it’s the combination of increasing prosperity in the 1960’s in general in the economy and then discovery of people who are not partaking in that. And it’s also wrapped up in some of the civil rights activities. I think it’s part of that cycle of discovering continuing poverty at a time when there’s growing prosperity in the economy more broadly.

Lindsey:                 What would you say are the major risks of just not having a farm bill between today and December 31st. From the agency perspective, are there things that are going to be put on hold? From an operational standpoint, what shifts for you all today?

Anne:                       USDA is funded through a separate appropriations process, so it doesn’t affect the agency operations. It affects whether or not some programs can be implemented. I think because there are a number of programs that are relatively smaller and often are then re-authorized with retroactive funding, it becomes less urgent to pass the bill immediately when there are big differences of view about how to go forward on the policy side. But in general, it’s relatively uneventful. Unless you happen to be a person who participates in programs that are not to be funded.

Lindsey:                 So there’ll be delays in program implementation possibly, whether that’s a grant program or some of the conservation programs, etc. But I guess EQUIP does have the advantage of having funding, which is great.

Anne:                       Yeah EQUIP does have funding, and those who already have contracts under other kinds of conservation programs, they continue to receive the payments that are part of the contract that they’re already in. But if someone wants to apply new to those programs, that’ll have to go on hold and the same with rural development programs and these foreign market access programs. They’re not able to fully fund those operations. There are a number of individual programs that will have to go on hold, anticipating that they will be refunded when the new bill passes, but it’s not without impact, but it’s not the stark impact that I think that people sometimes imagine. The dairy one is the one that always weighs heavily on the deadline, when this really needs to get done, because having to implement that permanent law dairy program would be very expensive and outside the sort of policy agreement of these days. We don’t provide that kind of price support to commodities anymore. And so it would be quite a shift in approach.

Lindsey:                 Well, Anne, thank you so much. This has been very helpful. Thanks so much for your time. I really appreciate it. Is there anything else that you wanted to make sure we recovered?

Anne:                       Well, I want to reiterate that although there are some impacts for some programs and I don’t want to minimize how difficult that can be for people who participate and depend on those programs, but I also wouldn’t want listeners to walk away thinking that we’re on a cliff’s edge here. The process continues forward and there’s either extension or agreement and programs are refunded, so it’s not the first time this has happened.

Lindsey:                 Alright, well we will be keeping track of how that process goes. Hopefully we’ll see something new by the end of the year.

Anne:                       Okay. Thank you.

Lindsey:                 Bye. Bye. If you want to learn more about the history of USDA programs and the impacts of an expired farm bill, check out today’s show notes. You can also join Team Farm Bill to take action and help us get a farm bill reauthorized by texting “farmbill” to 40649. We’ll have a link to take action in the show notes for today and also you can figure out how to take action by checking out our new instagram @youngfarmerspodcast. You’re to-do for this week is to vote this coming Tuesday. It’s an important way to make sure your voice is represented during the farm bill process. I have already voted. I just went right to my board of elections, did my ballot early. It’s done. Taken care. No stress this Tuesday. If you haven’t already, please write us a review. We’d love to hear your thoughts, good or bad. We want to hear from you. It’s important to us. Give us some feedback. Thanks to Radio Kingston for the use of this space. This podcast was edited by Hannah Beal. We’ll talk to you next week.

 

Join our email list to receive critical actions, resources, and updates.