House Agriculture chairman Michael Conaway says he tried to help every section of the country in his version of the 2018 farm bill, which was ratified by his fellow House Republicans but now is stalled by myriad House-Senate disputes. One of the House provisions, to give some but not all growers the opportunity to potentially increase their subsidy payments, “does not seem prudent,” said four university economists.
The “big four” farm bill negotiators are expected to meet in private on the farm bill today. If the negotiators reach agreement soon, the earliest that Congress could pass the compromise bill would be mid-November. “It would be extremely important to get it done before the end of the year,” said Kevin Skunes, past president of the National Corn Growers Association, on the “Adams on Agriculture” program.
One of the issues for the negotiators is the House proposal to allow growers in areas that suffered exceptional drought during 2008-2012 to update the so-called program yields for crops grown on land eligible for USDA’s Price Loss Coverage subsidy. As the economists note in the farmdoc Daily blog, “Farms with higher program yields will receive higher payments. Hence, the ability to update yields to higher levels is desirable.”
Growers in the central and southern Plains and in a small part of the Southeast, mainly in central Georgia, would be eligible to make the updates under the wording of the House provision. “The drought-designated regions do not include areas impacted by the major 2012 drought,” said the four economists, who were from the University of Illinois and Ohio State University.
In addition, they said a comparison of yields and of crop insurance loss ratios between counties in the designated area and non-designated counties raised questions about whether the designated areas fared worse than other regions.
“This matter is particularly important … as these provisions can have long-ranging impacts. Opportunities for yield updating occur infrequently … Hence, giving one area of the country preference does not seem prudent,” said Gary Schnitkey, Nick Paulson and Jonathan Coppess of the University of Illinois and Carl Zulauf of Ohio State University.
To offset the cost of the yield update, the House bill would bar subsidy payments on the so-called base acres that are part of the farm program, also a controversial proposal. Early this week, Iowa Sen. Chuck Grassley said corn, soybean and wheat growers would lose base acres, while cotton farmers boosted their program yields. Land with base acreage is widely believed to be more valuable than land lacking it.
A shake-up in base acres is reasonable if unpopular, said Conaway. He questioned if farmers ought to be in the farm program if they plant grass for 10 years on base acres. “It’s a hard conversation to have,” he said during an Agri-Pulse Open Mic interview.