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STATUS QUO: In large measure, the 2018 Farm Bill process has been described as a "status quo" bill, facing calls to at least maintain the farm income safety net in times of low prices.

Farm bill path still uncertain

Policy Report: Producers left waiting for clarity on the future of farm programs.

September came and went without a new farm bill. While the "Big Four" chairmen and ranking members of the agricultural committees have been meeting and negotiating differences in House and Senate farm bill legislation for several weeks, they were not able to reach a compromise by the end of September.

As a result, there is not yet a new 2018 Farm Bill to replace the 2014 Farm Bill, which expired on Sept. 30. The current outlook is for negotiations to continue with the stated goal of passing new farm legislation in the lame-duck session of Congress to convene after the midterm elections in November. However, the immediate impact and the longer-term outcome of the current impasse remains a question at this point.

Expiring 2014 Farm Bill
Since new legislation was not completed, the 2014 Farm Bill expired at the end of September without a replacement in place. The immediate impact of the 2014 Farm Bill expiration differs by program.

Farm commodity programs are guided by "permanent legislation" that does not have an expiration date, but itself dates to 1949. Every modern farm bill has technically superseded this permanent legislation, but with an expiration date. If new legislation is not approved, this permanent legislation would take effect. However, the 2014 Farm Bill programs cover 2018 commodity production, so permanent legislation does not affect any commodities until 2019.

While fall-seeded wheat may go in the ground with uncertainty over program rules for 2019, the real impact is for milk production, which due to its daily harvest, would be the first to face 1949 program rules as of Jan. 1, 2019. So, the term "milk cliff" is often used to describe the ultimate deadline of December 31 to pass new legislation or at least extend current legislation to avoid the impact of permanent legislation.

Some programs are authorized permanently, including crop insurance, disaster assistance (made permanent in the 2014 Farm Bill) and the Supplemental Nutrition Assistance Program (SNAP). While any changes proposed in the current farm bill deliberations would not happen without new legislation, the programs themselves could continue operating under existing rules and funding authority.

Other programs, however, face either limitations on new activities or elimination altogether in the absence of a new farm bill or at least an extension of now-expired legislation. Some programs, such as the conservation programs, may be able to continue operating on current commitments, but likely not offer new enrollment opportunities.

Some programs lack both the authorization and funding to continue and may have to close down, barring at least a short-term extension, including some trade promotion and grant programs.

While negotiations on a new farm bill were ongoing, there was little talk of a short-term extension of current policy. But as the expiration of the 2014 Farm Bill arrived with no new bill in place, there was mention of a short-term extension to keep current programs in place and put off the ramifications of expired legislation as described.

2018 Farm Bill prospects
With attention still focused on efforts to put forward new farm bill legislation before the end of the year, negotiators have to return to the same difficult questions that weren't resolved between the passage of farm bill legislation in each chamber in June and the expiration of existing legislation in September. And with the uncertainty of the November election clouding the future of control in Congress, the ability to find compromise on key provisions is extremely challenging.

In large measure, the 2018 Farm Bill process has been described as a "status quo" bill, facing calls to at least maintain the farm income safety net in times of low prices and income while also facing no new budget authority and, therefore, limited opportunities to fund major changes or additions to existing programs. However, that has not meant a lack of proposed changes and challenges that remain unresolved for now.

From observations of the ongoing negotiations, it is apparent that some of those proposals have been major challenges to any final agreement. While both bills propose to maintain the status quo in commodities with a continuation of the Agricultural Risk Coverage and Price Loss Coverage programs, there have been battles over protection levels, base acreage and payment limit provisions.

In conservation, there have been major differences over the fate of the Conservation Stewardship Program, and whether it would be maintained or effectively rolled into the Environmental Quality Incentives Program with substantially less total funding.

Then of course, there is nutrition and the battle over SNAP, which was thought to be the primary challenge from day one. While the Senate proposed some changes to management and oversight of SNAP, it largely kept the existing program in place.

In contrast, the House proposed substantial changes to tighten eligibility provisions and strengthen work requirements. Those changes would effectively reduce participation and total spending on SNAP, drawing loud opposition from SNAP proponents even as the House bill maintained overall SNAP program spending and reinvested the savings in education and job training programs for those facing work (or education) requirements.

For all of the differences noted above and throughout most of the rest of the bill, it was thought that a compromise eventually could be found to push a 2018 Farm Bill across the finish line. However, as the process now stretches to at least the lame-duck session, the added uncertainty of the November election and potential changes in control of Congress in the new year add additional challenges to the negotiations and the securing of final passage in each chamber.

Managing uncertainty
In the meantime, producers are left waiting and watching for some clarity on the future of farm programs. At the same time, they also await more direction on several other major policy issues, not only the ongoing trade conflict, but also bioenergy policy and environmental policy.

Managing for the current situation and uncertainty involves making sound decisions that incorporate both current conditions and potential future directions. It also involves keeping a close eye and ear to the policy arena to be aware of and engaged in the ongoing developments.

Lubben is an Extension Policy Specialist at the University of Nebraska-Lincoln.

TAGS: Management
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