Although farm program spending, including nutritional programs such as SNAP, represents roughly 2 percent of the total Federal Budget, the 2018 Farm Bill debate will begin and end with a focus on budget implications, according to Mary Kay Thatcher, Senior Director of Congressional Relations for the American Farm Bureau Federation.
In comments to Michigan Farm Bureau members attending the 98th annual meeting in Grand Rapids, Thatcher stressed that regardless of the specific commodity program being considered, it will need to be a zero-sum game in terms of total federal budget expenditures for the 2018 farm bill.
“We’re going to be working with less money to write a new farm bill than we had a few years ago,” Thatcher said. “So every decision we make about what kind of commodities we help, like dairy, is going be focused on how much money is it going to cost us to do that.”
What about splitting out the nutrition programs from pure commodity title programs? “Bad idea,” Thatcher warned. “If we dropped SNAP - the old food stamp program - out of the Farm Bill, agriculture represents about 3/10 of 1 percent of the federal budget. The fact is, especially when you think about the House of Representatives, we simply don't have enough rural votes to pass a Farm Bill without the SNAP program being integrated.”
High on the list of many Congressional members is a reduction of federal crop insurance subsidies, says Thatcher. Calls for means testing, a concept seriously debated in the 2014 farm will be back on the table.
“Crop insurance is really going to continue to be in the bull's-eye,” Thatcher predicted. “Crop insurance now costs more than all the commodity title and the conservation title expenditures combined. Why do you rob a bank? Because that's where the money is! That's exactly why they're looking at crop insurance premium subsidies.”
Previous means testing concepts have focused on arbitrary Adjusted Gross Income figures, that once exceeded would limit crop insurance premium subsidies to $40,000. Thatcher says that figure would cover total insurance premiums on approximately 1,000 acres of corn.
“They (Congress) have this idea that we can sort of not worry about the big guys and we can spend all of our attention on the small guys, but the fact is that insurance is a risk pool and in general bigger farmers have less risk,” Thatcher said. “So if we shove them out of the insurance pool, it means you have to change the ratings, which means that small and medium-size farmers are going to pay more for their crop insurance.”
In terms of a dairy program, Thatcher predicted that the Margin Protection Program (MPP), if it survives, won’t be called MPP in the 2018 farm bill, given the program’s dismal track record.
“I think it's a question of how do we make enough changes in that program (MPP) at a reasonable cost, because again any money we spend on that has to come from somewhere else,” Thatcher said. “I strongly suspect that the focus is going to be on the ‘smaller farmers,’ the folks that produce 5 million pounds of milk or less, instead of the bigger guys.”
According to Thatcher, AFBF continues to advance a Dairy Revenue Protection proposal through the Federal Crop Insurance Corporation which would operate much like revenue protection for corn and soybeans and wheat.
“We've gotten some really positive feedback from farmers that if we can get that approved through USDA, that Dairy Revenue Protection is something they would be interested in using to hedge their bets,” she said.
For Michigan specialty crop producers, Thatcher said there continues to be an emphasis on whole farm revenue protection. “I think we’re finding the problems, and USDA seems very willing to fix those,” she said. “I suspect that's the future of trying to protect the specialty crop industry.”
Desperate for a legislative victory of any kind, Thatcher is optimistic that Congress will move quickly to have the Farm Bill done by the end of 2018. “The Farm Bill is something that we can get through Congress primarily because it is a fairly bipartisan bill – the people who care about it really stick together,” she said. “So I think there's a great desire in Congress to show before the elections next year that they can accomplish things and if the Farm Bill is one of them, they'll go for it.”