Part 1: The House Farm Bill Mark-Up

This week on Wednesday, April 18, the full House Agriculture Committee met and successfully voted to report its version of a 2018 Farm Bill, based on a draft released last week by Committee Chairman Mike Conaway (R-Texas) and backed by Committee Republicans (H.R. 2, the Agriculture and Nutrition Act of 2018).  The bill was passed on a party line vote of 26 to 20, with all Republicans voting in favor and all Democrats opposed.

The Farm Bill, vital to American agriculture and food policy, has been stuck in a holding pattern for months, and the House mark-up is an important first step if there is to be any chance of passing it before the existing Farm Bill expires on September 30th.   Budget pressures, low commodity prices, trade tensions, and internal partisanship, all have conspired to create a treacherous political landscape for farm legislation this year.  Even with the successful Committee mark-up, it remains a betting proposition whether the bill can secure the 218 votes needed for House passage, and that’s before even starting to factor in dramatically different views on the Senate side of Capitol Hill. 

The House Committee package is designed to navigate these treacherous seas, and one result is that different parts of the package appear conservative, pragmatic, and radical, all at the same time.  Titles I and X, covering traditional farm supports and crop insurance, are a testament to stability, despite the fact that Federal crop insurance spending has been targeted by a wide range of conservative groups.  The Title I programs, heavily restructured in 2014, are maintained and strengthened wherever possible.  Conservation programs, while absorbing budget reductions, also emerge largely intact, though some Committee Members voiced concern over combining the Conservation Stewardship and the Environmental Quality Incentives Programs.

On the other side, in Title IV, Nutrition, the Committee bill sharply redefines and curtails the existing Supplemental Nutrition Assistance Program (SNAP), which provides food assistance to over 40 million low income Americans at a cost of $70 billion per year.  Among other things, the bill imposes new work requirements, tightens eligibility standards, and eliminates benefits such as automatic availability of the Standard Utility Allowance.  This effort has sparked an intense partisan backlash from Democrats both within the Committee and in Congress as a whole.  Chairman Conaway, highlighting the bright side of this equation, said simply: "Except for the SNAP portion, this is a bipartisan bill."

The mark-up itself was a tame affair completed within a single day.  Ranking Democrat Collin Peterson (D-Minnesota)  signaled in advance that Democrats would not offer amendments, and those submitted by Committee Republicans – largely adopted on block – included no major challenges to either the Nutrition nor the Crop Insurance titles.   Once it convened, Committee Members spent almost two full hours on opening statements.  Almost twenty Democrats took the opportunity to speak and all opposed the bill, focusing primarily on the changes to SNAP and concern that farm programs were not adequately helping farmers in the current environment.  Many also expressed concern over the process.   The Agriculture Committee normally prides itself for bipartisanship, but many Democrats voiced concern that, this time around, the Committee failed to allow for the Minority to weigh in during the drafting stage. Nutrition Subcommittee Ranking Democrat James McGovern (D-Ma.), for instance, noted that he did not see the text for the Nutrition Title until the bill was being introduced, despite having sat through the subcommittee’s twenty-three hearings on SNAP.  

Republicans, by contrast, mostly withheld opening statements in order to expedite the process.  Only a handful spoke, all supporting the bill. Once the Committee began reviewing individual titles, the partisan tone of comments remained, particularly on Title IV, Nutrition.

So what does the mark-up tell us about prospects for a 2018 Farm Bill in Congress this year?  Here are a few signals--

The partisan divide held.  First and foremost, as the Committee’s final tally demonstrated, Democrats and Republicans all voted as united partisan groups on the legislation.  If this pattern holds on the House floor, with a straight party line vote, then the Farm Bill should eke out a narrow victory. But the margin is very narrow.  If a small number of Republicans decide to jump ship over opposition to crop insurance or other subsidies, or a small number of farm state Democrats decide to support the bill, this balance could tip.  During consideration of the last Farm Bill -- a particularly difficult process where the new bill did not become law until 2014, two years after the prior Farm Bill had expired in 2012 -- the House at one point was forced to pass two separate vehicles, one covering Nutrition, the other covering the rest, and reunite them in Conference.  Few want to repeat that experience.

Further, a party-line vote in the House bodes poorly for a House bill’s reception in the Senate, where rules give minority Democrats more opportunity to insist on shaping policy.  The result could be two very different bills emerging from the two chambers, making a House-Senate conference particularly interesting and important.    

Trade is a focus.  In the current climate where agriculture has seen itself impacted by fears of tariffs and trade wars, particularly involving China, trade has risen to a level of attention beyond what it normally receives in a Farm Bill.  Secretary Perdue has stated that USDA will help farmers affected by punitive tariffs, but Collin Peterson and other Committee Democrats raised, both in mark-up statements and in a separate letter to President Trump, the prospect of using the Farm Bill as a vehicle to build longer-term supports, such as using available funds to bolster the Price Loss Coverage (PLC) beyond the existing provision to allow PLC reference prices to rise up to 15 percent with improving prices.

The trade discussion also brought concerns of what might happen if the Farm Bill is only extended and not passed this year. With the Foreign Market Development (FMD) Program under the $50 million baseline crosshairs, like so many other programs, an extension would no longer maintain continued funding for it. Many groups would see a hit to their international programs at a time when trade is a top priority. No trade amendment was proposed on the spot, but it is likely this issue returns before the Farm Bill is completed.

So too are farmer demands for a stronger response to low commodity prices.  With prices of corn, soybeans, wheat, cotton, sugar, and other key crops sustaining years of historic low prices, the strain on rural economies is severe.  Budget pressures made it difficult for the House bill to respond within baseline limitations, but pressures to provide additional help were heard from several Committee Members.  This issue, too, is likely to reemerge before the bill is finished.

This week’s House Farm Bill mark-up was the first act in a long drama. Challenges to crop insurance spending, for instance, are likely to recur on both the House and Senate floors as the respective bills move forward.  The same with Nutrition.  Further, a bill able to gather the 218 notes needed for passage in the House will likely vary substantially from one in the Senate, where for instance, the appetite for radical revisions to SNAP is far less.  All this could set the stage for a difficult and important House-Senate conference late in the year.

But now we have a strong first step forward.  Will pragmatism win out?  Come early.  Buy popcorn.  And if you need more than popcorn, OFW Law can help navigate the waters or address any Farm Bill requests your company or organization may have.

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