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2018 Farm Bill a Lot Like the 2014 Version, but with Some Key Changes

December 21, 2018

December has come with a holiday present for agricultural producers with congressional passage of the new farm bill and President Trump signing it into law on Dec. 20, helping to remove some uncertainty about operational decisions.

“This legislation maintains a strong safety net for the farm economy, invests in critical agricultural research and will promote agriculture exports through robust trade programs,” said U.S. Secretary of Agriculture Sonny Perdue in a news release.

Amy Hagerman, assistant professor of agricultural and food policy with Oklahoma State University’s Division of Agricultural Sciences and Natural Resources, began studying the conference report on the 2018 farm bill shortly after it was released.

“The timely passage of this farm bill is good for producers as 2018 has been a tough year, and came right on the heels of other tough years,” she said. “Farmers and ranchers are looking for the certainty provided by a new farm bill as they plan for 2019 and beyond. The 2018 farm bill looks a lot like the 2014 farm bill, but with some key changes.”

Hagerman said farmers and ranchers will be given the opportunity to reelect to either Agricultural Risk Coverage County Option or Price Loss Coverage for the 2019 to 2023 crop years. The Agricultural Risk Coverage Individual Coverage option has been removed. Fewer than 1 percent of acres nationally were signed up under the ARC-IC option.

“Farmers will have more flexibility in the ARC-PLC decision,” she said. “Although farmers will elect to either ARC or PLC for the 5-year period, each year after 2021 they will have the option to switch their election. Producers also will have the option to update yields.”

For farmers with grassland or pastureland that has crop base, the crop base will not be changed to “unassigned base” but the land will not be eligible for ARC or PLC payments. Instead, a new grassland incentives program under the Conservation Stewardship Program has been created at a rate of $18 per acre. The new farm bill also increases the marketing assistance loan rates.

Livestock and dairy producers also will see some changes under the new farm bill. The Margin Protection Program for dairies has been renamed the Dairy Margin Coverage Program, and creates additional incentives for participation.

The livestock disaster assistance programs – Livestock Indemnity Program; Livestock Forage Program; and Emergency Assistance for Livestock, Honey Bees and Farm-raised Fish Program; often commonly referred to as LIP, LFP and ELAP, respectively – were all reauthorized and the payment cap was removed from the ELAP program.

Hagerman said the payment cap for the LIP program was previously removed in the Bipartisan Budget Act of 2018.

Three animal disease prevention and management program additions, including the U.S. Vaccine Bank that would hold foot and mouth disease vaccine, also were funded for a combined $300 million over 10 years.

“Although changes were proposed for the payment limitations and adjusted gross income means testing, the 2018 farm bill maintains the current levels,” Hagerman said. “Also, be aware the definition of family was expanded to include first cousins, nieces and nephews.”

Crop insurance was maintained with a few notable changes. For farmers that conduct grazing operations on their cropland – common for stocker producers who graze cattle on winter wheat – a provision is made that allows for insurance policies covering both grazing and crop purposes. The bill also makes changes to the Whole Farm Revenue Protection program to improve its effectiveness, which did not get a lot of use under the 2014 farm bill.

In the horticulture title, the farm bill registers the legalization of hemp production and removal of industrial hemp from the list of controlled substances.

“This only applies to hemp with a tetrahydrocannabinol or THC level below 0.3 percent, plus applicable state laws would still be in effect,” Hagerman said. “However, hemp is included as a crop eligible for crop insurance under title specifications.”

In the conservation title, Conservation Reserve Program acreage will be allowed to go up to 27 million acres and the rental rate cap will be reduced. In addition, changes were made to increase the flexibility for grazing.

“The Conservation Stewardship Program will continue under the 2018 farm bill, but the funding was reduced,” Hagerman said. “The saving associated with the reduction was used to expand funding of the Environmental Quality Incentives Program. Other conservations stewardship programs and easement programs from the 2014 farm bill were continued as well.”

A proposal to create a Feral Swine Eradication and Control pilot program also was included. A total of $75 million will be made available for threat assessments, control methods and land restorations associated with feral swine.

“The importance of trade promotion and building trade relationships was readily apparent in 2018,” Hagerman said. “The farm bill continues trade development and international food aid programs.”

Hagerman added the four trade promotion programs from the 2014 farm bill were consolidated into a single program, the Agricultural Trade Promotion and Facilitation program.

“Other programs enhance international food aid and response to disasters abroad, and continue support for the Cochran and Borlaug fellowship programs,” she said.

Although the divisive mandatory work requirements were not a part of the nutrition title in the 2018 farm bill conference report, many changes were made in that title to strengthen work incentives and reduce fraud.

The credit title includes expanded support for beginning farmers and ranchers, including allowing some part of military service count toward the experience requirement for veterans. The 2018 farm bill also would expand loan limits.

Under the rural development title, funds will be provided to combat opiod addiction and provide mental health services in rural communities, continue support for broadband access and work toward the enhancement of rural infrastructure.

“During the late hours of the conference committee, and in light of the California wildfires, changes were proposed to expand forest management for wildfire mitigation,” Hagerman said. “Changes in the forestry title to expand forest management and forest health programs were included, although perhaps not to the extent desired in the late proposals.”

The 2018 farm bill was introduced in the House of Representatives in April, 2018. After failing to pass on the first vote, it passed on the second vote on June 21. The Senate passed their version on June 28. The conference committee to reconcile the two versions convened on Sept. 5. On Nov. 28, the conference committee announced they had an agreement in principle. The report was signed on Dec. 10. The Senate passed the farm bill 87 to 13 on Dec. 11, with the House passing the bill 369 to 47 the following day. President Trump signed the bill into law on Dec. 20.

Source: Oklahoma State University