Ag groups: Don't cut the farm bill

Legislative Watch: Ag groups urge ag committees to leave farm bill uncut as hearings begin; push for rural policy emphasis in White House; still waiting on Perdue confirmation process.

P. Scott Shearer, Vice President

February 24, 2017

4 Min Read
Ag groups: Don't cut the farm bill
Getty Images/Brendan Hoffman

Don’t cut the farm bill is the message that over 500 national, state and local agricultural, conservation and nutrition groups are telling the Senate and House Budget Committees as it prepares the Fiscal Year ’18 budget.

The groups remind the committees that the 2014 farm bill was cut by $23 billion and the Congressional Budget Office’s January cost estimates find that spending on crop insurance and nutrition assistance is estimated to be $100 billion lower.

In a letter to the budget committees, the group says the House and Senate Agriculture Committees should be allowed to write a new farm bill “without arbitrary budget cuts or caps.” The groups say, “With the agriculture and rural economy struggling, households across the country struggling to meet their basic needs for nutrition, and farm income down 46% from only three years ago, it would be perilous to hinder development and passage of the 2018 farm bill with further cuts.”

Those signing the letter include the American Farm Bureau Federation, American Bankers Association, American Soybean Association, Bread for the World, Ducks Unlimited, Farm Credit Council, Feeding America, National Association of Conservation Districts, National Cattlemen’s Beef Association, National Corn Growers Association, National Cotton Council, National Farmers Union and National Pork Producers Council.

Farm bill hearings begin

The Senate and House Agriculture Committees began hearings on the state of the farm economy and issues that need to be addressed in the 2018 farm bill.

The Senate Agriculture Committee held its first-in-a-series of field hearings to discuss the 2018 farm bill last Thursday at Kansas State University. The committee used the hearing to gain insights from individuals working in agriculture on the state of the farm economy and what issues need to be addressed in the new farm bill. Keeping crop insurance was a key message from the witnesses. The witnesses oppose any means testing or other restrictions on crop insurance. The committee will hold a field hearing in Michigan later this spring.

The House Agriculture Committee held a hearing on Feb. 15 to examine the economic factors that could help with the development of the farm bill. Economists who testified at the hearing emphasize the challenges facing farmers, including persistent low commodity prices, increasing debt-to-asset ratios and declining land values and cash rents. The economists, however, note that despite these challenges, land values are still relatively strong and are not declining precipitously; debt-to-asset ratios are historically low; energy prices and interest rates remain low; and some commodities could see an uptick in 2017.

USDA Chief Economist Robert Johansson says, “With interest rates still low and farmland values declining relatively slowly, farm debt presents a lower risk to the sector than in the 1980s. Current data suggests interest payments on current debt relative to net farm income is about 20%; whereas in 1985 it exceeded 60%.”

Nathan Kauffman, assistant vice president for the Federal Reserve Bank of Kansas City, told the committee low commodity prices have driven farm income to a fourth straight annual decline which has increased financial stress among borrowers. Kauffman says, “Agricultural credit conditions have decreased somewhat over the past year, and financial stress in the U.S. farm sector appears to have increased modestly as commodity prices and farm income remain low, but a farm crisis on the scale of the 1980s still does not appear imminent.”

Ag groups suggest emphasis on rural policy

Agriculture is critical to the U.S. economy and with multiple federal agencies having an impact on rural areas it is critical there is coordination among those agencies to ensure that federal resources are efficiently and effectively used.

This is the message that a number of agricultural organizations emphasize to President Trump in a letter when they asked that an Office of Rural Policy be established in the White House or a senior member of the White House staff be assigned to “ensure that the interests of rural Americans are addressed” at the highest levels of the administration.

Those signing the letter include the American Association of Community Colleges, Farm Credit Council, National Cattlemen’s Beef Association, National Council of Farmer Cooperatives, National Farmers Union, National Pork Producers Council and National Rural Electric Cooperative Association.

Still waiting on Perdue confirmation hearing

The Senate Agriculture Committee is waiting on the official paperwork of Secretary of Agriculture nominee Sonny Perdue. Chairman Pat Roberts (R-KS) says as soon as the committee receives Perdue’s paperwork the committee will move forward on Perdue’s confirmation hearing.

There are 13 other USDA appointments that will need to be confirmed by the Senate.

About the Author(s)

P. Scott Shearer

Vice President, Bockorny Group, Inc.

Scott Shearer is vice president of the Bockorny Group Inc., a leading bipartisan government affairs consulting firm in Washington, D.C. With more than 30 years experience in government and corporate relations in state and national arenas, he is recognized as a leader in agricultural trade issues, having served as co-chairman of the Agricultural Coalition for U.S.-China Trade and co-chairman of the Agricultural Coalition for Trade Promotion Authority. Scott was instrumental in the passage of China Permanent Normal Trade Relations and TPA. He is past chairman of the USDA-USTR Agricultural Technical Advisory Committee for Trade in Animals and Animal Products and was a member of the USAID Food Security Advisory Committee. Prior to joining the Bockorny Group, Scott served as director of national relations for Farmland Industries Inc., as well as USDA’s Deputy Assistant Secretary for Congressional Affairs (1993-96), serving as liaison for the Secretary of Agriculture and the USDA to Congress.

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