2018 Farm Bill Conference Report Summary December 11, 2018

Transcription

1 2018 Farm Bill Cnference Reprt Summary December 11, 2018 On Mnday, December 10, 2018, the leaders f the Huse and Senate Agriculture Cmmittee annunced that a sufficient number f Huse and Senate cnferees had signed the Farm Bill cnference reprt and that it had been frmally filed in the Huse f Representatives. The bill, H.R. 2, the Agriculture Imprvement Act f 2018, was apprved in the Senate tday, and is expected t be up fr a vte by the full Huse later this week. A summary f prvisins imprtant t wheat farmers is ffered here thrugh a title by title breakdwn. Each sectin includes an verarching summary f highlights fllwed by a bulletpint breakdwn f each relevant prvisin. Title 1 Cmmdities The Cmmdity title includes several imprtant prvisins beneficial fr wheat grwers. Specifically, farmers will have a re-electin pprtunity fr the 2019 crp year, which will apply fr 2 years, and then they will have an annual ptin t chse a new prgram beginning with the 2021 crp year. PLC is imprved thrugh a reference price escalatr prvisin t enable reference prices t increase if market cnditins imprve, and all farmers will have an pprtunity/ptin t update their payment yields. In ARC, the same reference price escalatr will apply t the flr price, imprvements are made t the yield cmpnent f the frmula, RMA data will be used as the first data surce where sufficient data is available, irrigated and nnirrigated yields will be published, the physical lcatin f a farm will determine which cunty payment rate applies, and large cunties wuld have the ptin t split int smaller administrative units. Additinally, ARC-Individual will cntinue t be an ptin fr grwers. A prvisin is included t remve farm prgram eligibility frm farms that were nly in grass between ; hwever, after pushback frm NAWG and thers, this prvisin is much narrwer than the riginal Huse prvisin, is limited t just the five years f the Farm Bill, and wners f thse farms will have an pprtunity t enrll thse farms in a new Grassland Cnservatin Initiative. The wheat lan rate fr purpses f Marketing Assistance Lans is increased 15 percent t $3.38 per bushel. ARC-Cunty, ARC-Individual, and PLC are reauthrized Re-electin pprtunity On a farm by farm and crp by crp basis, farmers can re-elect prgram participatin fr the 2019 crp year, as well as a yearly electin beginning in 2021 Failure t make a unanimus electin fr 2019 results in n prgram payments fr that year; fr each crp will be assigned the same electin was applicable fr the previus farm bill. Base acres Any farm that was planted entirely t grass r pasture between January 1, 2009 and December 31, 2017, will be ineligible fr farm prgram payments during the fiveyear perid f the farm bill. This ineligibility applies t crpland that was idle r fallw during that perid. B ase acres and payment yields will be maintained n thse farms, they will just be ineligible fr ARC/PLC payments fr the crp years. A rugh estimate we ve heard is that this prvisin will impact rughly 2/3rds fewer base acres as cmpared t the riginal Huse prvisin Fr thse farms that have base acres that have becme ineligible fr farm prgram payments, farmers can enrll thse farms int a Grassland Cnservatin Initiative within CSP by undertaking a pririty resurce cncern; payments wuld be $18 per acre.

2 PLC Yield update Beginning with the 2020 crp year, prducers may update their prgram yield fr each cvered cmmdity t 90 percent f the average yield per planted acre n the farm frm ignring years where the cvered cmmdity was nt planted n the farm multiplied by the yield update factr fr the cvered cmmdity as shwn belw; yield plug is 75% f cunty average. Fr example, if average wheat yield n farm was 35 bu/acre, prducer can update his PLC yield t 30.8 bu/ac (90% x 35 bu/ac x ). ARC Reference price escalatr Enables the PLC reference price t increase up t 15% if market prices imprve sufficiently (parameters are defined in the bill) Requires that USDA publish payment rates within 30 days f the end f the marketing year fr each cmmdity If an RMA crp insurance prduct is available, the RMA yield must be used fr determining cunty yields; if nt available, then USDA has flexibility in determining ther surces f data r can use the yield histry f representative farms in the state, regin, r crp reprting district Physical lcatin f a farm will be used fr cunty yields Plug yield is increased frm 70 percent t 80 percent f the transitinal yield Requires USDA t calculate and use a trend-adjusted yield factr t adjust yields, similar t the crp insurance trend-adjusted yield endrsement Requires the use f an effective reference price like in PLC, such that if market prices imprve the flr price can increase Requires USDA t publish separate irrigated and nnirrigated yields in each cunty Requires USDA t publish payment rate infrmatin within 30 days f the end f the marketing year fr each cmmdity Publishing f data surces ( Requires USDA t publish fr each crp year and each cmmdity, infrmatin describing the ARC guarantee, the average histrical cunty yield, the natinal average market price, and the actual average cunty yield. It als requires this

3 infrmatin t be published fr the 2018 crp year within 60 days f enactment. It als requires USDA t publish the data surce used fr each cvered cmmdity by cunty and natinally, beginning with the 2018 crp year. Administrative units Cunties that meet certain size requirements may be split int n mre than 2 administrative units. The FSA state cmmittee, in cnsultatin with the cunty r area cmmittee, has the ptin t make this ne-time electin t divide the cunty. Eligible cunties must be larger than 1,400 square miles and cntain mre than 190,000 base acres; this prvisin is limited t 25 cunties natinwide. Preference will be given t cunties that have greater variatin in climate, sils, and expected prductivity. Marketing lans Increases Marketing Assistance lan rates (see chart). Payment limitatins Hard cap f $125,000 per individual but marketing lan gains and lan deficiency payments wuld n lnger be subject t the cap. Expands the definitin f family members t include first cusins, nieces, and nephews Applies sequestratin reductins t PLC r ARC payments befre applying payment limitatins AGI threshld fr eligibility Maintains $900,000 Adjusted Grss Incme (AGI) fr cmmdity and cnservatin prgram eligibility Title 2 Cnservatin The Cnservatin Title includes several prvisins f interest t wheat grwers. EQIP and CSP are mdified t jin the prgrams within the law and will cntinue t prvide cst-share assistance t grwers. Incentive payments are added t EQIP and CSP is mdified t be based n verall funding, instead f acres. These changes t CSP will alter enrllment and re-enrllment, making thse applicatins cmpete against each ther. Funding fr EQIP increases, but funding fr CSP decreases which will result in a mve tward cnslidatin f the prgrams. Additinally, a new Grasslands Initiative in CSP is available t thse grwers impacted by base acre suspensin in Title 1. CRP is expanded t allw mre acres but includes limitatin n payments fr general and cntinuus sign-up will limit rental payments. Signing Incentive Payments and Practice Incentive Payments will cntinue but will be decreased. CRP cst-share n seed cst will als be limited. These changes were required t be able t pay fr the increased number f acres allwed int the

4 CRP prgram. The bill des nt cntain CRP easements and des nt include prvisins n minimal effects determinatins fr wetlands cnservatin. Cnservatin Reserve Prgram - CRP Gradual increase in acreage cap t 27 millin acres At least 2 millin acres f grasslands by 2023 Cntinuus sign-up & CREP limited t 8 millin acres in FY19 increasing t 8.6 millin acres in FY22 85% f cunty rental rate fr general sign-up 90% f cunty rental rates fr cntinuus sign-up Signing Incentive Payments (SIPs) and Practice Incentive Payments (PIPs) cntinued, but lwer Seed cst limitatin set at 50% f actual cst f seed mixture Revised haying and grazing prvisins CLEAR 30 (Clean Lakes, Estuaries, and Rivers) included as pilt prgram with 30 year cntracts SHIPP (Sil Health Incme Prtectin Prgram) included as a pilt prgram CRP TIP funding increased frm $33 t $50 millin and allws participatin withut requiring landwner/cntract hlder t retire Re-enrllments in CRP are subject t additinal reductins in rental payments Des nt include easements Envirnmental Quality Incentives Prgram - EQIP Incentive payments added EQIP 50% livestck set aside retained EQIP 10% wildlife set aside Increased payment fr high pririty practices (determined by states) Funding increasing frm $1.75 billin in FY19 t $2.025 billin in FY23 Cnservatin Stewardship Prgram - CSP Current cntract hlders that wuld be eligible t renew in FY2019, will be allwed t renew under ld prgram (nly fr these cntract, nt future expiratins) CSP changed t be a dllar based, future re-enrllments wuld be cmpetitive with new enrllments Funding increased frm $700 millin in FY19 t $1 billin in FY23 New Grassland Cnservatin Initiative specifically fr thse whse base was suspended in Title 1 Must undertake cnservatin practice n the acres tied t suspended base $18 per acre payment rate Separate frm any ther CSP cntract r EQIP cntract Wetland Cnservatin Des nt include minimal effects determinatin prvisins Includes funding fr mitigatin banking, and plicy directin fr n-site wetland determinatins Title 3- Trade The trade title f the Farm Bill cntains sme changes that will be beneficial t wheat farmers. Specifically, the title created the Agricultural Trade Prmtin and Facilitatin prgram that will huse the Market Access Prgram (MAP) and Freign Market Develpment Prgram (FMD). FMD had lst baseline mving frward as a standalne prgram, s the creatin f this umbrella prgram will allw it t have baseline mving frward. Additinally, there were sme changes t the Fd fr Prgress act that will nt impact the current cmmdity bucket f funding. Agricultural Trade Prmtin and Facilitatin (MAP/FMD)

5 Establishes the Agricultural Trade and Facilitatin Prgram, an umbrella prgram fr FMD, MAP, emerging markets, and TASC. FMD is funded each year at $34.5 millin, MAP at $200 millin with a trust fund f $3.5 millin per year fr greatest need; funds can als be used in Cuba Fd fr Prgress Act f 1985 The cnference language adpts the Huse versin fr Fd fr Prgress, which reauthrizes the prgram t FY The cnference language requires that the Secretary will prvide an annual reprt n rate f return fr mnetizatin prgrams. The cnference language requires that a pilt prgram be authrized fr FY 2019 which wuld allw financial assistance t be eligible t implementing partners, right nw it is nly cmmdities that are available. This will nt cme ut f the current cmmdity bucket funding, but rather a pilt in additin t the cmmdity prgram. Title 5- Credit The credit title ntably included large increases in verall authrizatin levels f lans fr the years 2019 thrugh It reduces r waives the 3-year experience requirement fr farm wnership lans t beginning farmers. Lan Authrizatin Levels Overall lan authrizatin level is increased frm $4.226 billin t $10 billin/yr Increases the indebtedness limit fr FY fr: (1) direct wnership lans frm $300,000 t $600,000. (2) guaranteed wnership lans frm $700,000 t $1,750,000. Increases the indebtedness limit fr FY fr: (1) direct perating lans frm $300,000 t $400,000. (2) guaranteed perating lans frm $700,000 t $1,750,000. Title 7- Research The research title f the Farm Bill saw sme big wins fr wheat, particularly with regard t the U.S. Wheat and Barley Scab Initiatin which received an verall increase in authrizatin frm $10 millin t $15 millin and places a prgram specific limitatin n Indirect Csts t be capped at 10%. Supprt fr Research Regarding Disease f Wheat, Triticale, and Barley caused by Fusarium Graninerum r Tilletia Indica NAWG supprts cntinued funding fr research f Fusarium head blight. US Wheat and Barley Scab Initiative received an increase in the authrizatin frm $10 M t $15M. (Current apprpriated funding f the SCAB Initiative is at $9.45 M.) In additin, the Bill specifies a limitatin n Indirect Csts by any recipient f a prgram grant frm USWBSI t be capped at 10%. Simplified Plan f Wrk McIntire-Stennis, Hatch and Smith Lever funding has been maintained Call fr States t match Federal Funding levels at lcal State Land Grant Clleges fr Hatch. Wrk requirements have been streamlined by deleting audits in favr f peer review versight. McIntire-Stennis Cperative Frestry Research Act t include 1994 Institutins that ffer an assciate's degree r a baccalaureate degree in frestry t be eligible fr assistance fr frestry research Reprt n Funding fr the Natinal Institute f Fd and Agriculture and ther extensin prgrams.

6 Instructs that n later than 2 years after the 2017 Census f Agriculture is released under the Census f Agriculture Act f 1997, the Secretary submit t Cngress a reprt describing the funding necessary t adequately address NIFA s needs, activities, and ability t prvide adequate services fr the grwth and develpment f the ecnmies f rural cmmunities based n the changing demgraphic in the rural and farming cmmunities in the varius States, paying particular attentin t carrying ut activities relating t small and diverse farms and ranches, veteran farmers and ranchers, valueadded agriculture, direct-t- cnsumer sales, and specialty crps. Title 11 Crp Insurance There are several psitive prvisins included in the crp insurance title. The tp f the list is that it maintains the current strng structure f the crp insurance prgram by nt impsing any means testing, cuts t the federal cst-share, r cuts t the delivery system. Additinally, it includes a requirement that RMA undertake research and develpment f alternative methds fr adjusting fr quality lss, refrm t the 508(h) reimbursement prcess, enables grwers t purchases separate plicies fr grazing and harvesting f crps, and language regarding hw cver crps impact the insurability f summer fallw. Cver Crps Vluntary practice f cver crpping shall be cnsidered a gd farming practice under paragraph (3)(A)(iii) if the cver crp is terminated in accrdance with subparagraph (B). Cver Crp terminatin shall nt affect the insurability f a subsequently planted insurable crp if the cver crp is terminated in accrdance with subparagraph (B). In a cunty in which summer fallw is an insurable practice, a cver crp in that cunty is terminated in accrdance with subparagraph (B) shall be cnsidered as summer fallw fr the purpse f insurance Treatment f Frage and Grazing Catastrphic risk prtectin fr crps and grasses used fr grazing- crps that can be bth grazed and mechanically harvested n the same acres during the same grwing seasn, prducers shall be allwed t purchase separate plicies fr each intended use, as determined by the Crpratin, and any indemnity paid under thse plicies fr each intended use shall nt be cnsidered t be fr the same lss fr the purpses f sectin 508(n) Administrative Basic Fee Up t $655 Enterprise Units Allw single-enterprise unit acrss cunty lines Research and Develpment Authrity Instructs RMA t carry ut research and develpment f ptinal, alternative and actuarially sund methds f adjusting fr quality lsses: that des nt impact actual prductin histry f a prducer that prvides that, in circumstances in which a prducer has suffered a quality lss t the insured crp f the prducer that is insufficient t trigger an indemnity payment, the prducer may elect t exclude that quality lss frm the actual prductin histry f the prducer.