With agriculture experiencing a dramatic downturn as commodities pile up and prices retreat to historic lows, attention is turning to the next Farm Bill and how it might be affected by November's election.
With agriculture experiencing a dramatic downturn as commodities pile up and prices retreat to historic lows, attention is turning to the next Farm Bill and how it might be affected by November’s election.
Trade is also an important issue with the U.S. awash in excess supplies of feed and grain crops.
With farm loans steadily deteriorating, many farm groups are hoping to get the Farm Bill process started early. The current bill is set to expire in two years.
Dale McCall, who has a farm near Yuma but lives in Longmont, is the president of Rocky Mountain Farmers Union. He presided over his first annual convention as the organization’s president last week in Loveland.
He said his organization would begin holding listening sessions this winter to gather input on Farm Bill priorities.
His primary concern was maintaining adequate support for farmers. Of particular concern to him was guaranteed government loans for young and beginning farmers. “There’s only a certain amount of support in the budget each year for these,” he said. “I’m worried about the farmers who will be coming in to renew those loans next spring.”
Since Republicans now control both houses of Congress and the White House, he also anticipated renewed pressure to split the commodity title of the farm bill apart from provisions related to conservation and nutrition.
Many farm organizations oppose that idea, none more staunchly than National Farmers Union.
“I’ve starting referring to it as the food and farm bill. I think that’s important,” McCall said.
NFU President Roger Johnson, who traveled to Colorado to give a report to the membership, pointed out that the last time an effort was made to split up the Farm Bill, it only served to delay its passage.
“It’s difficult to argue for a safety net for farmers but no safety net for consumers,” he said.
Senator Pat Roberts, of Kansas, who currently chairs the Senate Ag Committee opposes splitting up the bill, but Representative Mike Conaway, of Texas, current chairman of the House Ag Committee, is more receptive to the idea, said Barbara Patterson, who handles government affairs in NFU’s Washington D.C. office.
In general, the current Farm Bill is popular and probably just needs tweaking rather than wholesale transformation, Patterson said.
Both Johnson and Brent Young, Colorado State University’s ag economist for northeastern Colorado, said the Agricultural Risk Coverage option in the current commodity support program is one aspect that needs work.
“As prices go down over time, the support level is greatly reduced. There may not even be a payment at all in 2018,” Young said. “We really need to make some changes in regard to that program. Right now Price Loss Coverage is the better safety net.”
PLC functions more like traditional price protection, while ARC is intended to provide revenue assurance.
TPP’s outlook uncertain
A large coalition of agricultural groups had hoped to squeak through passage of the Trans-Pacific Partnership during the lame duck session of Congress, but Trump’s surprise election likely put the kibosh on that.
Johnson, who served as a former North Dakota commissioner of agriculture before becoming NFU president, said he was hopeful his group could work constructively with the new administration to beef up anti-trust enforcement and fight for fair trade.
NFU opposes TPP. Johnson referred to the 12-member Asian trade pact, which represents 40 percent of the world’s economy but doesn’t include China, as dead on arrival.
“I think a pretty powerful case can be made that (opposition to) TPP had a big role in Trump getting elected,” Johnson said. “(Bringing it up in the lame duck session) is off the table. I don’t see any way that the Republican majorities will allow it to come to the floor.”
The promise of economic benefits from global trade had worn thin with many farmers at the convention, including Ken Macy, a rancher from Pine Bluffs, Wyoming.
“I’ve been studying trade policy since the 1950s, and hearing about how trade agreements would advance the farm economy, but today wheat is as low as it’s ever been,” he said during his treasurer’s report.
The group did hear a more positive assessment of trade from Tanner Ehmke, who was raised on a wheat farm in Western Kansas and is now senior economist for CoBank in Denver. Ehmke appeared as part of a panel addressing the state of the farm economy.
“A Trump era, where the world walks away from international trade, is going to be bearish for the world economy,” he said. “Fact is, trade creates wealth and when the world is not trading, wealth is not being created.”
World economic growth has stalled, with the growth phases between recessions becoming weaker each time, he noted in his presentation.
“We are three years into a downturn that is becoming even more interesting now with the new administration,” he said.