Now the clock starts ticking for the U.S. Department of Agriculture.
President Barack Obama on Friday signed a new five-year farm bill that will sink billions more dollars into crop insurance, provide desperately sought disaster assistance for ranchers and overhaul the way the government supports dairy farmers.
“It helps rural communities grow, gives farmers some certainty [and] puts in place important reforms,” Obama said, standing in front of a green John Deere tractor and a produce display, at Michigan State University, before putting his name on the Agriculture Act of 2014. A crowd of about 500 applauded.
Traveling with the president to East Lansing was Sen. Debbie Stabenow (D-Mich.), one of the farm bill conference committee’s four principal negotiators who reportedly convinced the White House to hold the ceremony in Michigan, instead of Washington, D.C.
Also in tow on the trip was Agriculture Secretary Tom Vilsack, who will be in charge of prioritizing what in the 949-page bill gets implemented first and how to get the new programs up and running.
First on USDA’s to-do list should be putting in place a disaster assistance program for ranchers, said Mary Kay Thatcher, senior director of congressional relations for the American Farm Bureau Federation. A similar program attached to the 2008 farm bill expired in 2011, leaving ranchers at the mercy of a scorching drought in 2012 that decimated hay and forage crops and a freak blizzard in the Dakotas and Nebraska last year that killed tens of thousands of cattle and other livestock.
“Those guys haven’t had help in over two years,” Thatcher told POLITICO.
The new farm bill contains about $7 billion worth of funding for ranchers, including the Livestock Indemnity Program and the Livestock Forage Program, which provides immediate assistance for those who have been hit by disaster.
But USDA needs to also be mindful that American farmers will be going back into the fields soon and the government will have to act fast to establish the new crop insurance and subsidy programs that were the hallmark achievement for lawmakers in the new farm bill, Thatcher said.
Gone now will be the controversial direct payments that sent out about $5 billion worth of checks to farmers every year. That money went out to farmers and land owners whether or not they need it and sometimes even if they weren’t crowing crops, but the 2014 farm bill took a different tack with counter-cyclical programs that pay out when revenue or prices drop.
The farm bill, Obama said, “saves tax payers hard-earned dollars by making sure that we only support farmers when disaster strikes or prices drop. It’s not just automatic.”
If USDA gets the programs up and running in time, grain, oilseed and other farmers will have a choice between subsidies like the Agriculture Risk Coverage plan that makes payments when revenues fall below a trigger level and the Price Loss Coverage plan that pays out when market prices fall below trigger levels.
One of USDA’s biggest tasks, according to officials at the National Farmers Union will be making sure that “farmers are well-informed about their decision between PLC and ARC.”
And ARC will be especially complicated, Farm Bureau’s Thatcher said.
“I think ARC for the individual farmer versus for the county will be extremely difficult for USDA to write in regs,” she said.
Cotton farmers have been taken out of the traditional crop subsidy equation and given a new insurance-based safety net called the Stacked Income Protection Plan, and USDA will likely be challenged in putting together the complex new program that collects premiums and pays out indemnities when county revenues fall below a trigger level set by a combination of historical yields and market prices.
The new farm bill gives USDA six months to set up a never-before-tried support system for America’s 50,000 dairy farmers, a concept that was cobbled together by Hill staffers, the USDA and industry representative as a compromise in the final days before Senate and House negotiators produced their conference report. The margin insurance program makes for complex policy writing.
Obama praised the farm bill as a bipartisan triumph and thanked Republican lawmakers like Sen. Thad Cochran (R-Miss.) and Rep. Frank Lucas (R-Oka.) for their work on it. Some 50 lawmakers were invited to East Lansing for the signing, including Republicans, but no members of the GOP accepted the invitations, White House press secretary Jay Carney told reporters on Air Force One, according to press pool reports.
“I am pleased we have a new farm bill in place to provide certainty for the next five years to America’s farmers, ranchers, and consumers, and I appreciate the efforts of everyone who helped make it possible,” Lucas said in a statement released Friday minutes after the signing.
Much of that “certainty” will come from the $41 billion the government will spend over the next five years on a beefed-up crop insurance program, that lawmakers have said is the heart of the farm bill and Obama championed Friday.
“This farm bill includes things like crop insurance so that when a disaster like the record drought we’re seeing across much of the West hits our farmers, they don’t lose everything they’ve worked so hard to build,” he said.
Of course the Supplemental Nutrition Assistance Program will be responsible for the bulk of farm bill spending - roughly $756 billion out of the farm bill’s total projected $956 billion over 10 years. Obama said he would not sign a farm bill unless it contained that “protection for vulnerable Americans.”
White House officials have said previously that Obama did not approve of the $8 billion in cuts the new farm bill makes to SNAP, but the president didn’t mention the reduction in his address Friday.
The cuts could have been much deeper, though. The Republican-controlled House attempted to cut SNAP spending by $40 billion, a far cry from the $4 billion that the Democrat-controlled Senate approved in its competing farm bill version.
”A large majority of SNAP recipients are children, or the elderly, or Americans with disabilities,” Obama said Friday. “A lot of others are hardworking Americans who need just a little help feeding their families while they look for a job or they’re trying to find a better one.”
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