The Agricultural Act of 2018, or more commonly known as the 2018 Farm Bill, is a massive piece of legislation that is up for reauthorization this year. Not sure what the Farm Bill is? Well, if you eat, this bill impacts you. It impacts every single American resident, and largely, food and agriculture globally. This piece of legislation is comprehensive and multilayered, spanning 12 titles in total including research, conservation, commodities, nutrition programs energy, rural development, foreign and domestic trade, among others. While the Farm Bill may not get as much attention as Tax Reform or Immigration Policy, it is as equally important in that it affects what you and everyone else get to eat on a daily basis. Given the breadth and depth of this legislation, we’re going to provide some insight on the larger parts of the previous farm bill and the outlooks for the 2018 version.
The 2014 Farm Bill had a projected budget of $489 Billion, covering five years from FY2014-FY2018. Of the mandatory spending programs, four of the twelve titles accounted for 99% of anticipated spending. Nutrition, Crop Insurance, Conservation, and Commodities. Nutrition totaled 80%, Crop Insurance and Commodities combined 13%, and Conservation comprised another 8%, while all other titles combined the remaining 1%. Nutrition includes the Supplemental Nutrition Assistance Program (SNAP) and the Commodities program provides subsidies to producers of major “commodity crops,” such as wheat, corn, cotton, soybeans, and peanuts to name a few. These subsidies make up for any declines in market revenue for these producers. Over the years, the recalculated spending for these titles changed in that Nutrition spending dropped by $24 Billion and Commodities went up by $15 Billion.
Buried in that small 1% included spending for things like minority and beginning farmers, fruits and vegetables, local food, organic farming, rural development, nutrition incentives and agricultural research. In scale, these topics seem minor but their real-world application has had a major impact on food and agriculture in the U.S. Despite the success of these “minor” programs, they may be at risk with the new 2018 Farm Bill.
While the 2018 Farm Bill has not been signed, there is much political heat already surmounting around a few particular topics. Nutrition, and SNAP in particular is at the top of this. Two major points have arisen from the discussion so far: work requirements and limits on what people can buy with SNAP benefits. In addition, an approach proposed by the White House, is to replace “food stamps” with a predetermined “box,” of food stuffs, primarily made up of canned goods.
In terms of commodities, it seems the slide is shifting more towards broader federal crop insurance than direct subsidies. In the 2014 Farm Bill, commodity producers (with the exception of Cotton and Dairy) were given the choice of Agricultural Risk Protection or Payment Loss Coverage to protect them from fluctuating markets and yields. Agricultural subsidies have a long and controversial history, to the degree we won’t get into at this time. However, it is important to note that most of these commodity crops do not make up the food you eat. A large portion go into food aid, textile fibers, livestock feed, and biofuels.
While commodities, crop insurance, conservation, and even SNAP may change in form, they do have permanent funding, regardless of whether a new bill is passed on time or not. But those other “minor” programs, buried in that 1%, are what we are a bit more concerned about. If the 2018 Bill is not passed on time, they will lose funding.
As things move along for the 2018 Farm Bill, we will continue to post updates. There is much at risk and much opportunity. How things will shake out, particularly because of the shadowed nature of the Farm Bill, has yet to be determined. However, we feel it is important to maintain awareness of this important legislation as it not only affects farmers, but anyone who needs to eat!