Outside Influences

The Farm Bill Debate Begins Early

A battle is already underway over whether cotton farmers should get government payments.

AP Photo/David J. Phillip
Jerry Hagstrom
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Jerry Hagstrom
Feb. 9, 2016, 8 p.m.

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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