DALLAS—The 2014 farm bill is only two years old, but a crisis in cotton is suddenly causing the debate over the 2018 farm bill to begin.
Extremely low cotton prices were the focus here last weekend when House Agriculture Committee Chairman Mike Conaway spoke to the National Cotton Council. Several growers told National Journal that auctioneers in Phoenix and Lubbock, Texas are booked up until April with cotton-farm-equipment sales and that cotton processors worry that they won’t have enough raw products to stay in business.
Most commodity prices have fallen dramatically: The Agriculture Department’s Economic Research Service reported Tuesday that 2016 net farm income would be the lowest since 2002, and a drop of 56 percent from its recent high of $123.3 billion in 2013.
The agriculture community managed to save the crop-insurance program from cuts in the 2016 omnibus appropriations bill, but portions of the crop and dairy programs are not functioning as expected. Antihunger activists wonder whether the long series of hearings on food stamps that Conaway is holding may result in an improved program or make it more difficult for the poor to get food.
Cotton is in an especially difficult position. In order to resolve the case against the U.S. cotton program that Brazil won in the World Trade Organization, Congress removed cotton from the commodity title that makes payments to farmers when incomes or prices fall and created a cotton-insurance program that has been slow to attract growers. But industry leaders say the immediate issue is that Indian and Chinese subsidies have led to a glut of cotton.
The cotton growers and coalitions in the House and Senate have asked Agriculture Secretary Tom Vilsack to designate cottonseed, which is used to make animal feed and cooking oil, as an oilseed, so it would be it eligible for the payments that soybean and other oilseed producers get. Vilsack has responded that USDA lawyers say he doesn’t have the authority to make that designation and that appropriators have also restricted his ability to take other actions to help the cotton growers.
Conaway’s committee lawyers say Vilsack does have the power to designate cottonseed an oilseed, but Conaway also said he’s willing to work with USDA to find another solution. Those ideas could come up as early as Thursday when Vilsack testifies before the House Appropriations Agriculture Subcommittee.
Conaway said here that he wants USDA, rather than Congress, to act because “reopening the farm bill is something we can’t do. You don’t want to be seen as trying to reopen the deal.”
But he also said that, in 2018, “if something is not working, we will try to address that.”
That statement would be music to the ears of other crop farmers who have been noticing some problems with the new Price Loss Coverage and Agricultural Risk Coverage programs set up in the commodity title. In some cases, payment rates have varied dramatically in adjacent counties. Corn farmers in states that have not traditionally grown corn and that have highly variable yields have found that USDA doesn’t always have good-enough farm surveys to establish proper yields and payments.
Former National Corn Growers Association President Bart Schott, who farms in LaMoure County, North Dakota, told the Red River Farm Network, a radio-news operation, this week, “When we went to the bankers, we told them we’d get an ARC-County payment. When I saw the map of the counties that were left out, I couldn’t believe it. For LaMoure County, it’s about an $8 million hit. It’s a ton of money not coming into the county this year.”
Dairy farmers, meanwhile, are suffering from low milk prices, but the new dairy program makes payments when the difference between the price and the cost of production narrows. It has not narrowed enough to trigger payments. Only about half of the dairy producers have signed up, which means they won’t have a safety net if prices go even lower.
Conservatives have urged the Republican leadership to take food stamps—officially the Supplemental Nutrition Assistance Program, or SNAP—out of the farm bill because separate farm and nutrition bills would be harder to pass. Conaway told National Journal that he has not made a decision about that, but he also told the cotton growers that they should create support for the farm bill by educating consumers that the bill is a stabilizer in food prices.
It will be interesting to see if the farmers find time for that consumer-education project as they prepare for the 2018 farm bill.
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