*This is the next article in our 2023 Southwest Economic Outlook series. Hear from Oklahoma State University and OSU Extension Service, and Texas A&M University and TAMU AgriLife Extension Service economists about the 2023 outlook.
One of the biggest pieces of legislation on the agenda for the 118th Congress in 2023 is reauthorizing the farm bill. With the November 2022 mid-term elections behind us, the House will be led by a narrow Republican majority and the Senate by an even narrower Democratic majority. It is difficult to predict how this structure will impact farm bill negotiations. In 2018, the farm bill conference agreement received strong bipartisan support in both chambers of Congress. However, this bill faces several challenges that have the potential to split Congressional members along party lines.
Supplemental Nutrition Assistance Program (SNAP)
SNAP and other programs in the nutrition title represent the majority of farm bill spending (almost 85%). Nutrition title spending is anticipated to increase with this farm bill based on the higher cost of the food we have all seen at the grocery store, and administrative changes to how the SNAP benefit rates are calculated. Spending on the nutrition title alone is expected to push the price tag for the next farm bill to more than $1 trillion over the next 10 years. The high level of SNAP spending may create challenges for those hoping to bring new initiatives into the nutrition title, like potentially codifying the Farmers to Families Food Box program developed to address supply chain disruptions during COVID-19.
How does climate-smart agriculture fit into the 2023 Farm Bill discussions? In the last two years, we have seen USDA make strategic changes like increasing rental rates for the Conservation Reserve Program and investing in research for climate smart agricultural practice adoption. In addition, the Inflation Reduction Act provided a short-term plus-up of $20 billion for flagship conservation programs like the Conservation Stewardship Program and the Environmental Quality Incentives Program. Maintaining those elevated funding levels may factor into potential discussions. Climate change has the potential to be one of the more partisan discussions in farm bill development in 2023.
Inflation, Costs of Production, and Commodities
Since 2018, the agricultural sector has experienced enough “black swan” events that we aren’t even sure black swans are that rare anymore. Weather conditions, inflation in the cost of inputs such as chemicals, fuel, and fertilizer, supply chain disruptions, and market volatility from world events have all resulted in uncertain market conditions for agricultural producers. These events have highlighted gaps in the current farm safety net, and Congress has responded with tens of billions in ad hoc assistance for agricultural producers over the last five years. All of this points to the need for improvements to the farm safety net – improvements that agricultural producers can count on in advance rather than hoping for after the fact. Agricultural groups have suggested a litany of improvements, from increasing reference prices, to establishing and/or improving margin coverage, to further improving crop insurance, to creating a permanent disaster program. Regardless of the proposed solutions, the overarching question remains: will there be new funding to make some of these changes in the 2023 Farm Bill?
There is no such thing as an easy farm bill. Each one faces its own unique set of challenges. For example, the 2018 Farm Bill was initially defeated in the House due to an unrelated immigration issue and then narrowly passed the House a month later, on a party-line vote. But, in the final analysis, the conference agreement passed both chambers with wide bipartisan margins just six months later, and it became the first farm bill since 1990 to be signed into law in the same year that it was introduced.
Ultimately, only time will tell how the process for the 2023 Farm Bill will unfold.
Read more about:Farm Bill
About the Author(s)
Assistant Professor, Department of Agricultural Economics, Oklahoma State University Cooperative Extension
Co-Director, Research Assistant Professor, Agricultural & Food Policy Center, Texas A&M University
Co-Director, Regents Fellow, Agricultural & Food Policy Center, Texas A&M University
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