Cotton and dairy producers complained about inadequate USDA support virtually since the 2014 farm bill took effect. Congress answered those complaints in the budget package passed at the end of last week, making an additional $1.2 billion available for the commodities in coming years. But the package also is likely to result in cuts of nearly the same amount, says the National Sustainable Agriculture Coalition.
“It’s kind of a wash,” said Greg Fogel, policy director for the small-farm group. The additional funding for dairy and cotton this year is a boon because it means a larger budgetary baseline for the programs in the 2018 farm bill. The downside, said Fogel, is that the package retains the so-called sequestration mechanism that keeps federal spending within targets set by Congress. “The new budget deal extends sequestration through 2027, with the result that commodity and conservation payments will be reduced by over $6 billion over the next nine fiscal years, including the extra $1 billion plus added via the new budget deal,” says NSAC.
Sequestration applies to crop supports and conservation programs, with the exception of contracts to idle land in the Conservation Reserve. “A huge chunk of money” could be taken out of farm bill programs, said Fogel. “Now we have a new problem.” Key will be whether the farm bill makes up for the funds threatened by sequestration, he said.
The budget deal made so-called seed cotton, which is cotton fiber still attached to the seed before ginning, eligible for the traditionally styled Price Loss Coverage subsidy, which is available to grain and soybean farmers. The cost of the program would be offset by barring growers from the insurance-like STAX program for cotton if they enroll in PLC. The Margin Protection Program for dairy farmers would be modified to reduce the premiums that farmers pay to enroll, make it easier to trigger payments and remove the cap on USDA spending on livestock insurance.