■ Agriculture Outlook

■ Agricultural Outlook

By Kent Thiesse

New Farm Bill on congressional agenda

The 2023 crop year will be the final year for the current Farm Bill, which is set to expire on September 30, 2023, unless there is an extension. A Farm Bill is one of the most comprehensive pieces of legislation that is passed by Congress. Passage of a new Farm Bill is very complex, with programs ranging from farm commodity programs to food and nutrition programs,fromconservationprogramstorural development programs, and several more. In many cases, finalizing a Farm Bill in Congress can be quite controversial, and not necessarily just by political party lines. The Farm Bill programs become quite geographical, with members of Congress wanting to protect the farm, food, conservation, and economic interests of their State or Congressional district.

Following are a few insights on the 12 Titles included in the current Farm Bill:

n Title I --- Commodities

TheCommodityTitleincludesallcommodity farm program payments, marketing assistance loans (MAL), and other crop subsidy payments. In the past two Farm Bills, crop producers have had the option to choose between the price-only “Price Loss Coverage” (PLC) and county yield revenuebased “Ag Risk Coverage” (ARC-CO) program, which has been an annual choice since the 2020 crop year. Some farm organizations would like to see increased crop reference prices and MAL loan rates, as well as to make some adjustments to the ARC-CO program payment formula. The “Dairy Margin Coverage” (DMC) program, which has proved to be quite beneficial for small to medium sized dairy herds (under 300 cows), was enhanced in the 2018 Farm Bill.

n Title II --- Conservation

The current Farm Bill set the maximum Conservation Reserve Program (CRP) acres at 27 million acres, with additional focus on the Grassland Reserve Program. The Farm Bill also set the maximum CRP rental rates at 90 percent (90%) of the average FSA “prevailing” rental rates for Continuous CRP contracts and at 85 percent (85%) for General CRP. There will likely be considerable support for expansion of the maximum CRP acres, as well as for increasing the maximum annual CRP rental rates to incentivize enrollment into the CRP program. The large 2022 “Inflation Reduction Act” contained several provisions that provided added funding for the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP), which are part of the Conservation Title.

n Title III --- Trade

This Title includes funding for important agricultural trade promotion programs, such as the Market Access Program (MAP), the Foreign Market Development Program (FMDP), and the Emerging Markets Program (EMP). These trade related programs are very important for opening new markets and maintaining existing markets for U.S. ag exports.

n Title IV --- Nutrition

TheNutritionTitle,whichincludestheSNAP program (food stamps), the Women, Infants and Children (WIC) nutrition program, and school lunch program, will probably be debated more than any other Title during Farm Bill hearings in 2023. The Nutrition Title will likely account for nearly 85 percent of annual federal spending allocated under the next Farm Bill, as opposed to 75 percent in the 2018 Farm Bill. Several billion dollars were added to the Nutrition Title budget base as part of COVID relief legislation and the 2022 Inflation Reduction Act.SomemembersofCongresswouldliketo separate the Nutrition Title from the Farm Bill; however, ag policy experts warn that funding for ag commodityprogramscouldbecomemuchmore difficult if SNAP and the other nutrition programs are removed.

n Title V --- Credit

This Title sets parameters and provides funding for the FSA direct and guaranteed loan programs, which have become quite important to farm operatorsandaglenders.ThedirectFSAfarm ownership loans are especially important to provide beginning farmers low interest loans to purchase farmland. Recently, there have been greater efforts to reach underserved farmers and ranchers with the FSA loan programs.

n Title VI --- Rural Development

This Title reauthorizes funding for rural development loans to communities and businesses,