Barry Flinchbaugh, professor emeritus at Kansas State, didn’t mince words about the current state of the farm economy during a recent Farm Foundation forum on implementation of the farm bill.
“I don’t know if we really comprehend or grasp the fact that net farm income has been cut in half in the last five years. That’s an astounding statistic,” he said.
Given the current struggles of farmers, Flinchbaugh thinks the recently passed Agricultural Improvement Act of 2018 is the most important farm bill since at least the 1980s.
“I think when the history book is written, the real impact of the (2018) farm bill is that it is farmer friendly,” he said.
Flinchbaugh was on a panel with Tara Smith, vice president of federal affairs for Michael Torrey Associates, a Washington, D.C., lobbying firm; and Alan Bjerga, senior vice president of communications for the National Milk Producers Federation.
Flinchbaugh credited Congress for putting aside partisan bickering and passing the farm bill just ahead of the late December government shutdown.
Most of his comments centered around conservation programs. “Some in farm country argue that it’s a mixed bag,” he said.
The Conservation Stewardship Program and the Environmental Quality Incentives Program both remained in the farm bill even though an earlier House version of the bill proposed killing CSP entirely. The five-year bill will shift funding for CSP, which pays participating farmers based on the performance of conservation measures, to EQIP, a conservation cost-share program run by the Natural Resources Conservation Service. Both programs were the subject of intense negotiations on Capitol Hill even though they are relatively small parts of the overall farm bill.
Certainty is what farmers need most right now, Flinchbaugh said. “It’s not coming from the trade war or the government shutdown. The real certainty is the farm bill,” he said.
And the trade war is something he thinks farmers have been unfairly hurt by.
“We need to end this trade war now,” he said, pounding his fist on a table. “Putting tariffs on aluminum and steel was stupid, period. Agriculture has been an innocent bystander.”
Flinchbaugh said farmers have been hurt on two fronts: by retaliatory tariffs, including the 25% tariff slapped on U.S. soybeans from China; and by higher machine costs caused by tariffs placed on imports of aluminum and steel.
Flinchbaugh called for the government to end the trade war and start negotiating multilateral trade agreements to open new markets for farm products.
“It’s time to end this,” he said of the trade war. “It’s time to admit it was ill-conceived and never was going to work.”
Sen. Pat Roberts, R-Kan., chairman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, said the farm bill makes improvements to several areas.
On commodities, Roberts said it improves Price Loss Coverage and Agriculture Risk Coverage, including requiring Risk Management Agency crop insurance data as the primary source for ARC county yield.
He also said the bill “strengthens and improves” existing crop insurance while also paving the way for developing new policies for quality loss, grain sorghum, limited irrigation and efficient irrigation practices.
Smith called changes to crop insurance programs more evolutionary than revolutionary, even though hemp, which is now a legal agricultural commodity, will now be eligible for coverage.
“Quite frankly, you can point to multiple provisions that did nothing more but add to statutes and practices that already exist,” she said. “Really, by and large, it was about improvements and tweaks.”
Smith said the recent federal government shutdown had little effect on crop insurance since it is a permanent program outside the farm bill.
Getting help for dairy
Bjerga said the dairy industry faired best in the farm bill because it needed to.
The 2018 Farm Bill authorizes the Dairy Margin Coverage program, replacing the Margin Protection Program. The new program allows dairy farmers to cover between 5% and 95% of their existing production history, up from the previous MPP, which only allowed coverage between 25% and 90%.
It will also cover margins between $4 and $9.50 in 50-cent increments up to the first 5 million pounds for Tier 1 coverage. Tier 2 coverage, more than 5 million pounds, is between $4 and $8.
Farmers will also be able to use the program in concert with Livestock Gross Margin and Dairy Revenue Protection.
You can find more information on the safety net program online.
Getting the new program up and running, and retroactive to Jan. 1 is a top priority. Bjerga said that current projections for margin over feed cost for 2019 are in the $8 to $10 per cwt range, exactly in the range of coverage for Tier 1.
“We’re very proud of this at National Milk,” he said of the DMC.