December 19, 2018
Congress passed the final version of the 2018 Farm Bill by a wide margin Dec. 12 and President Trump is expected to sign it into law soon. The long-awaited, much debated legislation was approved Dec. 11 in the U.S. Senate by an 87 to 13 bipartisan vote. The next day the House approved it 369 to 47. In the Senate all 13 “no” votes were Republicans. Iowa’s senior U.S. senator, Charles Grassley, a farmer, was one of those voting “no.”
Among other things, the legislation will fund key safety net programs for farmers for the next five years. Why did Grassley vote against the $867 billion farm bill? Several reasons, but the main one is that the final version of the 2018 Farm Bill once again fails to include the USDA payment limit reforms Grassley pushed for inclusion in the bill.
About 80% of the farm bill budget goes to fund food assistance programs, such as SNAP, which used to be known as food stamps. Disagreement on SNAP program reform was the main roadblock to moving the farm bill through Congress. The final vote on the farm bill came two days after the House and Senate finally agreed on wording in the SNAP section. They removed House provisions calling for tighter work requirements for food stamp recipients.
Loophole for large farms
One of the key reasons Grassley voted against the bill is because it failed to include reforms to limit federal subsidies to the wealthiest farmers and many nonfarmers. The new farm bill maintains current limits on subsidies but includes a provision to expand the definition of family to include first cousins, nieces and nephews, making them eligible to receive USDA program payments.
“At its core, farm policy should be a limited safety net that helps farmers weather the storm of natural disasters, unpredictable commodity markets and other unforeseen challenges,” Grassley says. “This bill goes well beyond that.” Expanding the “loophole” for family farms allows large farmers to “manipulate the system,” while creating even larger hurdles for young and beginning farmers.
“For years, the top 10% of farmers have received over 70% of the subsidies from the government,” Grassley says. “That’s only one of the many reasons it’s so hard for young and beginning farmers to get started.”
Strengthens conservation, dairy programs
Iowa’s junior U.S. senator, Joni Ernst, a Republican, voted for the new farm bill. A member of the Senate-House conference committee that reached agreement on the final version, Ernst says it strengthens soil and water conservation programs, while providing “critical mental health support” for farmers.
The Farmers First Act is included in the farm bill and will provide resources to help farmers handle mental stress caused by financial stress. “The bill also supports our nation’s dairy farmers, who are undergoing difficult times with low milk prices,” she says.
Issuing a public statement when the legislation passed Congress, Grassley thanked Ernst for her dedication to reforming the Conservation Reserve Program in the new farm bill. “The program’s intent is to reduce erosion, improve water quality and help wildlife populations,” he says. “Over the years, CRP has strayed from its intended focus.”
Some landowners have been getting more than $300 per acre to enroll their entire farms in CRP. That puts young and beginning farmers at a competitive disadvantage, Grassley says. In fact, even well-established farmers have had rented land taken away from them because it was enrolled in the program at lucrative rates.
Payment limit reform
Unfortunately, the 2018 Farm Bill did not include another critical reform that would help young and beginning farmers: "my payment limit amendment,” Grassley says. “To say I’m disappointed the new farm bill makes more subsidies available to the wealthiest farmers and many non-farmers, is a severe understatement. Especially when the impact of large farmers being allowed to manipulate the system is causing young and beginning farmers to face increasingly huge hurdles.”
Today, “we have a new farm bill that is intentionally written to help the largest farmers receive unlimited subsidies from the federal government. There is no other way to characterize what the conference committee has done,” Grassley says.
In the 2014 Farm Bill, both bodies of Congress approved what Grassley calls a commonsense amendment he offered that would have limited the abuses related to Title 1 subsidies. For the 2018 Farm Bill, the House didn’t allow debate to occur on Grassley’s proposed reforms.
New farm bill enlarges the loophole
When Congress was working on the 2014 Farm Bill, their conference committee inserted a loophole that exempted “family farms,” which account for about 95% of farms, from the new rules. The new 2018 Farm Bill makes that original loophole even larger.
“The new bill will allow nieces and nephews to qualify as part of a family farm without any new requirements that they actually have to work,” Grassley says. “Despite what some of my colleagues in Congress may say, this isn’t about helping nieces and nephews get into farming. Every person who is really farming already qualifies for Title 1 USDA payments by themselves, without this new gimmick.”
Allowing nieces and nephews to qualify as part of large farm entities merely allows large farmers to get more subsidies, Grassley says. “They just need to hire the right lawyer to structure things a certain way and they can receive unlimited taxpayer subsidies.”
Tighter control on subsidies
For years, the top 10% of farmers have received 70% of USDA farm program benefits. That’s only one of many reasons it’s so hard for young and beginning farmers to get started. “I’ve never heard of a single young or beginning farmer tell me the way to help them is to give more money to the largest farmers,” Grassley says.
Many farmers are hurting from the downturn in commodity prices. Corn and soybeans have had significant price declines the past several years. “If only all crops were as lucky as cotton with its high prices ensured by the federal government over the last year,” he adds. “However, market corrections do not justify Congress expanding subsidy loopholes for the wealthy, especially at a time when our long-term fiscal situation for the U.S. is as bad as it’s ever been.”
Grassley says, “The last time we passed a farm bill in Congress, our national debt was $17 trillion. Today it stands at $21 trillion and growing. At some point Congress needs to get serious about the need to control spending. This new farm bill represents an open-ended spigot of taxpayer subsidies in Title 1. Because of this, I could not vote for this farm bill.”
Grassley supports other provisions in new bill
Does Iowa Sen. Charles Grassley support other parts of the new farm bill? “Yes,” he says. As a member of the U.S. Senate Ag Committee, he points out that he and his colleagues worked hard this past year to improve the farm bill’s financial safety net for crop, livestock and dairy producers.
Tariffs, low commodity prices and market volatility are putting a pinch on the farm economy. Having a farm bill signed, sealed and delivered will alleviate some anxiety. This $867 billion USDA farm bill legislation will set ag and food policy for the next five years.
“Regarding the farm program, the new bill will allow farmers to choose between Price Loss Coverage [PLC] and Ag Risk Coverage [ARC] programs,” Grassley notes.
Starting in 2019, farmers may enroll in these programs on crop-by-crop and farm-by-farm basis. In 2020, farmers may update yield calculations at their Farm Service Agency office. In addition to providing funding for food stamps, as well as crop insurance, trade, research and conservation programs, the new farm bill includes money for rural broadband and mental health programs in rural America.
“Let’s be clear,” Grassley says. “A multiyear decline in farm income and uncertain farm exports is pinching the bottom line for Iowa farmers, especially corn and soybean growers.”
He adds, “Although I voted against the 2018 Farm Bill because my payment limit amendment got scrapped at the tail end, I support much of what’s in this final bill. And I’m glad farmers at least will have a measure of certainty in a time of financial uncertainty. When I take the reins of the Senate Finance Committee in January, I’ll continue working to open new markets for U.S. agriculture, grow homegrown renewable fuels and foster prosperity in rural America.”
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