In a bid to break the farm bill deadlock, Senate Agriculture Committee chair Debbie Stabenow said that she was “open to proposals” to increase so-called effective reference prices for all crops in the U.S. farm program but would not accept cuts in SNAP or climate funding. “If we’re going to get a farm bill done this spring to keep farmers farming, it’s time to get serious,” she said in a letter to all senators.
Lawmakers failed to pass a farm bill last year due, in part, to intractable disagreements over reference prices, which are the trigger for crop subsidy payments, and how to pay for them. Republicans have targeted SNAP and climate mitigation funds for cuts. Those savings could be used to pay for higher reference prices, a top priority of farm groups and their allies in Congress.
The 2018 farm bill included a so-called escalator provision to ratchet up reference prices by as much as 15 percent if there was an extended run of high commodity prices. The higher “effective reference prices” are beginning to take effect, notably for corn, soybeans, and wheat. “This means that under existing law, half of the [22] program crops and more than 90 percent of the program acres are going to see automatic 10 to 15 percent increases in their reference prices over the next few years,” wrote Stabenow.
“I am open to proposals that would make sure every covered commodity receives an increase under an ‘effective market price,’ ” she said.
University of Illinois analyst Jonathan Coppess said, “The effective reference price is a much more reasonable approach” as far as cost, but it has not attracted attention. Farm groups have advocated a statutory increase in reference prices but have not provided details. By one estimate, a 10 percent increase would cost $20 billion and a 20 percent increase would cost $50 billion.
In a year-end survey commissioned by Agri-Pulse, 51 percent of farmers said their top farm bill concern was more money for export promotion. Some 44 percent called for increased funding of crop insurance, and 41 percent backed higher reference prices. Agri-Pulse said the online poll reached representative samples of farmers and ranchers in the Midwest, South, and West. Roughly 59 percent of respondents said SNAP costs should be cut.
Stabenow said she was working with Arkansas Sen. John Boozman, the senior Republican on the Agriculture Committee, to double funding for trade promotion programs over the next five years.
The new farm bill should focus USDA assistance on active farmers, give farmers flexibility in the type of support they receive, provide timely assistance, and reach more farmers, said Stabenow. Crop insurance can be expanded to cover more specialty crop and livestock producers, she said.
“The 2018 farm bill provided cotton farmers with a choice between the traditional base acre programs and a highly subsidized and streamlined area-based crop insurance policy. The next farm bill should give a similar option to all commodities,” said Stabenow.
She said the new farm bill could build on the 2018 law “by providing bipartisan solutions to the challenges farmers are facing. … However, we’re not going to have the bipartisan votes to achieve these improvements if they are paid for by taking money from nutrition programs, which help more than 44 million Americans struggling with hunger, or from popular conservation programs, when the climate crisis is hitting farmers’ bottom lines every day.”