As the Farm Bill Works Its Way through Congress, Trade Issues Remain

At World Pork Expo last month a good friend made the comment “predicting farm policy is a lot like sorting hogs: Just when you think you’re done, you notice the back gate was open.” Here’s an update that lets you know where things stand on issues impacting your business, as of press time.

1. 2018 farm bill

After several weeks of uncertainty and one day short of the June 22 deadline to reconsider, the House of Representatives passed its version of the 2018 farm bill. 

The 213-211 votes moved H.R. 2, the Agriculture and Nutrition Act of 2018, on to the conference committee with the Senate.

Before the farm bill vote, the Republican leadership scheduled a roll call vote on the conservative immigration bill written by judiciary chair Bob Goodlatte. The measure did not clear the house, but the vote was enough to sway the votes of eight Freedom Caucus members who opposed the bill in May.

All Democrats and 20 Republicans continue to oppose the bill. Work requirements and other changes to the Supplemental Nutrition Assistance Program (SNAP) qualifications cemented those opposing votes.

The passage of this bill is critically important for the pork industry. The inclusion of funding for an FMD vaccine bank is a positive step in the right direction for livestock producers. The National Pork Producers Council (NPPC) continues to ask lawmakers for $250 million in funding for each of the five years of the bill. Of the total funding, they are asking for $150 million to be allocated for the bank, $70 million for state block grants for disease prevention, and $30 million for the laboratory network to support disease diagnostic support.

The house bill language includes funding at those levels for the first year. The funding level changes the following four years to $30 million for block grants and $20 million to be used at the discretion of the secretary of agriculture for the grants, labs and the vaccine bank.

The House version of the legislation also includes money for feral swine eradication. USDA estimates the damages caused by feral swine, and control of feral swine, to be more than $1 billion per year. The House bill also combines the Market Access Program and the Foreign Market Development Program into the new International Market Development Program. These programs have long been instrumental to creation and growth of international outlets for U.S. farm products.

Future of the Senate farm bill

Iowa Senator Chuck Grassley, R-Iowa, cast the lone “no” vote when the Senate committee voted to advance its 2018 version of the Farm Bill. The senior senator’s vote was not unexpected; he has long called for reform of the federal farm program payment structure.

A cloture vote in late June allowed senators to file amendments to the bill prior to debate on the floor. Amendments related to crop insurance, commodity programs, payment limits and several issues were offered. 

If an amendment to fund the FMD vaccine bank is not offered, the original language in the senate-approved bill would not change.

The senate version of the bill then moves to a conference committee.

Farmers face economic uncertainty

The economic uncertainty in farm country is putting pressure on legislators to get a farm bill completed as soon as possible. According to one congressional source, “We need to get this done so farmers know if they have a reliable safety net that will offer support in these uncertain times.” 

The Trump administration continues to press Congress to get a farm bill on the president’s desk before the current bill expires in September.

Despite the that most programs remain intact in both bills, nutrition program differences and a few commodity program differences will need to be ironed out.

2. Immigration policy

The conservative immigration policy bill written by judiciary chair Bob Goodlatte failed to pass the house, opening the door for the chamber to consider a compromise bill crafted by house leadership. Early indications were the compromise did not resolve the agriculture guest worker issue addressed in the Goodlatte bill; the vote on the house compromise package was delayed as of press time; it needed Senate support before it could become effective. Livestock producers continue to warn that a labor shortage would cause extensive financial harm for farmers, ranchers and their rural communities. Without agriculture guest worker reform, facilities could shut down, disrupting the slaughter of animals and on-farm production practices.

3. Trade war with China

The U.S. and China have until early July to settle their differences before the tariffs being proposed by both nations go into effect. If a resolution is not found (and many trade experts do not see that being the case), American agriculture will continue to bear the brunt through even greater tariffs on exported goods. The North American Free Trade Agreement (NAFTA) remains unsettled. Rumors continue to float that a trilateral agreement might be out of reach and that the three nations will continue to look for new bilateral agreements.  

4. Trump administration offers USDA plan for reform and reorganization

The Trump administration has proposed a reform and reorganization plan that would dramatically cut programing currently housed in USDA. The plan suggests nutrition programs be moved to the Department of Health and Human Services, and USDA housing programs would shift to the Department of Housing and Urban Development. The most notable change would be to consolidate the government’s food safety oversight into a new federal food safety agency. Other proposed changes include the merger of U.S. Fish and Wildlife Service with the National Marine Fisheries Services, with both programs being moved to the Department of Interior. Also earmarked for reform is the USDA’s small business programs to be moved to the Small Business Administration. Many of the proposals would require legislative action. Historically, reform plans have had little success in the past.