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Senate Farm Bill Advances

By Jerry Hagstrom
DTN Political Correspondent
and
Chris Clayton
DTN Ag Policy Editor

WASHINGTON (DTN) -- The Senate Agriculture Committee on Wednesday approved a five-year farm bill.

The bipartisan vote was 20-1 with only Sen. Charles Grassley, R-Iowa, opposed to the bill until he gets a payment-limits amendment considered.

Senate Majority Leader Mitch McConnell, R-Ky., who holds a seat on the committee but rarely attends meetings, showed up to announce that he wants the bill finished on the Senate floor before the Senate leaves on June 29 for its July 4 break.

Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said he hopes the bill will come up next week. Senate Agriculture ranking member Debbie Stabenow, D-Mich., joked that the floor action will take only one hour. Roberts pointed out that the 2014 farm bill took only two days to pass.

Unlike the House Agriculture Committee markup, the Senate markup had little commentary about the Supplemental Nutrition Assistance Program because there were so few changes compared to the current program.

The Senate bill advanced after amendments were adopted to allow the use of trade promotion programs in Cuba, to raise the limits on government farm loans and to give USDA energy programs mandatory funding. Senators filed a total of 196 amendments to the bill, but 66 were incorporated into a manager's amendments while some were offered and others were withdrawn, Roberts said.

The Senate bill lowers income levels for farmers to collect commodity or conservation payments from $900,000 adjusted gross income to $700,000 AGI. Grassley, though, wants to tighten language on active engagement on the farm and re-establish a tight payment cap. His amendments on those issues, though, were stalled Wednesday because of technical challenges with his language. So Grassley now will attempt to bring his payment fight to the Senate floor.

In opening remarks, senators talked about the need to provide "certainty and predictability" for farmers right now, as Roberts said, adding that the bill needed to be beneficial for all commodities. "We must have a bill that works across the entire country," he added.

Senators from major dairy states such as Sen. Patrick Leahy, D-Vt., and Sen. Kirsten Gillibrand, D-N.Y., sounded the alarm about the situation with dairy farmers right now and the need to boost support. "I see the depths and despair in many of these people who for generations have been the backbone of our communities," Leahy said.

Gillibrand added, "In New York State today, our dairy farmers are not only living on poverty wages at this point, but many of them are going out of business and they're committing suicide."

Gillibrand got to claim credit for her "Dairy Premium Refund Act" being included in the farm bill, which would return $77.1 million in insurance premiums paid by dairy farmers from 2015 to 2017 for a program "that left them empty-handed when milk prices plummeted."

The Senate bill boosts the Margin Protection Program by improving coverage levels and providing dairy farmers with more flexibility. The coverage rate is raised to $9 per hundredweight and increases the volume of milk that can be insured.

An effort led by Sen. John Thune, R-S.D., and Sen. Sherrod Brown, D-Ohio, to improve the Agricultural Risk Coverage (ARC) program did not come up for an amendment vote. Thune noted the program is at risk of losing value to farmers even though more than 77% of all base acres are enrolled in ARC. Still, the committee did not find a way to enhance the program moving forward.

"We will not have going forward in Title I a program that provides revenue protection, that provides protection not only against price loss, but production loss, and I think that's unfortunate," Thune said.

Thune said senators haven't been able to get budget scores or find offsetting revenue to make changes in ARC work. Thune wants to update base acres as a way to get acres off the base rolls that have not been farmed in several years but that still collect commodity payments.

"And with the limited funding in the farm bill, it makes sense, in my view at least, to target the funds to where they really need to go, and that's to those who are actually farming the land," Thune said.

Roberts noted he expects a large share of farmers will shift to the Price Loss Coverage (PLC) program, but Roberts also said bankers and others have cautioned against changing base acres. A base-acre update would drop 436,000 acres from base in Kansas alone, he said, which would lead to a 20% drop in land values, Roberts said.

"The same thing would happen in Oklahoma and other areas of the High Plains," Roberts said.

Grassley and Thune also championed making changes to the Conservation Reserve Program (CRP) in committee. Roberts' bill would increase the CRP acreage cap 1 million acres to 25 million acres. That compares to the House bill, which would bump up CRP to 29 million acres.

Thune wants to offer a plan to increase CRP acreage up to 26.25 million acres, but his proposal would also allow landowners to hay or graze up to one-third of their CRP acreage every year. Thune said this is needed to deal with problems such as chronic drought. Thune's CRP plan would also lower the CRP rental rate to 85% of the county land rental rate on general CRP signup compared to 88.5% in the Senate bill now. The House bill drops the rental rate to 80% of the country average.

Roberts and Stabenow initially opposed the CRP changes, but agreed they could allow an amendment on the Senate floor.

The Senate bill also includes McConnell's language removing hemp from the list of controlled substances. The Kentucky Republican called hemp a diversified crop that could be used for foam in car dashboards, for food and for medical uses. Kentucky already has more than 3,000 acres of planted hemp because of McConnell's pilot program in the 2014 farm bill.

"It's time to figure it out and see where the market will take us," McConnell said, adding it is an important new development in U.S. agriculture.

Grassley, as chairman of the Senate Judiciary Committee, objected that the hemp language is out of order because the bill should belong under his committee's jurisdiction. Grassley noted there is no oversight or understanding of the use of cannabidiol (CBD), and the product should be handled in a narrow, regulated pathway.

"Today's bill would allow any snake oil salesman to sell CBD," Grassley said, adding that it could put children at risk.

McConnell said he understands the concerns but consulted with the Justice Department and Food and Drug Administration and took into account suggestions from Grassley and Sen. Dianne Feinstein, D-Calif., ranking member of Judiciary Committee. And McConnell's bill does not alter the Food, Drug and Cosmetic Act, which oversees such products.

"Hemp should be allowed to flourish in this country as it once did and is again in my home state of Kentucky." McConnell said.

Regarding Cuba, Sen. Heidi Heitkamp, D-N.D., offered an amendment that she and Sen. John Boozman, R-Ark., sponsored to authorize USDA Market Access Program (MAP) and USDA Foreign Market Development Program (FMD) funding to go toward trade servicing, technical assistance and trade promotion activities in Cuba. Although it is legal to sell U.S. agricultural products in Cuba, financing is complicated and the use of USDA promotion programs is not allowed.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/ES)

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