The continuing slump in the farm economy and shortcomings in the U.S. farm program make it imperative for Congress to provide additional funding for the 2018 farm bill, said a powerhouse bloc of farm groups. Their appeal to congressional budget and appropriations leaders came two weeks after the House Agriculture Committee asked for more money so it could plug holes in the farm safety net.
When it was enacted, the 2014 farm law was forecast to cost $100 billion a year, three-quarters of it for public nutrition programs. Low food inflation is a primary reason that cost estimates for the five-year life of the farm law are slightly lower now.
“Farm budgets are very tight this year and with USDA predicting commodity prices to remain flat for the next several years, we need a strong, effective farm bill to help farmers and ranchers through this difficult, long-term period of depressed prices and income,” said 18 farm groups in a joint letter. “Providing this safety net will be impossible to achieve without providing additional funding outside the current farm bill resources.”
The groups did not suggest how large an increase in funding was needed. Traditional farm supports and the federally subsidized crop insurance system “must be strengthened,” they said. The insurance-like dairy and cotton subsidies created in 2014 “are woefully inadequate” and while the safety net has performed better for other growers, “these farmers have also suffered sharp declines in prices that requires a more effective response.”
Net cash farm income is forecast by USDA at $93.5 billion, or 31 percent lower than in 2013 when income was record high and the agricultural boom that began in 2006 was cresting. It would be the lowest net cash income figure since 2010. Farm debt is forecast to reach $395 billion this year, up 25 percent since 2013. Farmland values are declining and indicators of financial stress, such as the debt-to-asset ratio, while at benign levels, are creeping upward.
“While we do not yet have a full-fledged financial crisis in rural America, a good many farmers and ranchers are not going to be able to cash-flow in 2017,” said the letter, signed by the two largest U.S. farm groups and groups representing producers of corn, soybeans, wheat, cotton, sugar, milk, rice, barley, sorghum, peanuts and canola.