Congress Reaches a Compromise: the 2014 Farm Bill

2014 Farm Bill Includes Food Stamp Benefits and Farm Policy

Figure 1:  2014 Farm Bill includes food stamp benefits and farm policy

After considerable haggling between Democrats and Republicans, Congress passed the Agricultural Act of 2014 (2014 Farm Bill) with a $956 billion price tag to be spent over 10 years, and a net reduction of $23 billion relative to what the US was on track to spend without passage of this bill.  This current bill amends the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill, Kilpatrick).   The 2014 Farm Bill authorizes spending for the following: (Washington Post blog)

  • Supplemental Nutrition Assistance program (SNAP or commonly called food stamps) $756 billion
  • Crop insurance $93 billion
  • Conservation programs $56 billion
  • Commodity programs $40 billion
  • Everything else $5 billion

Food stamp benefits were the subject of intense debate between Democrats and Republicans.  The two sides disagreed on how deeply to cut spending. House republican leaders nearly killed the farm bill in the summer of 2013 when they split the farm policy measures from the nutrition provisions before rejoining them later.   Debbie Stabenow, democrat from Michigan and Senate Agriculture Committee Chairwoman, and Frank Lucas, republican from Oklahoma and House Agriculture Committee Chairman deserve the political credit for negotiating and shepherding the compromise that eventually passed both houses of Congress. (New York Times)

“This is not your father’s farm bill,” said Senator Debbie Stabenow after the bill passed both houses.   The complex array of stakeholders with competing interests impacted by the farm bill include farmers, rural communities dependent on agricultural economies, anti-hunter advocates, and budget watchdog groups seeking to cut government spending and the federal deficit.   The major policy changes in the 2014 Farm Bill include (Bill Summary):

  1. A subsidized insurance program to replace direct payments to farmers
  2. A reduction in spending for food stamps
Senate and House Compromise to Return Food Stamp Spending to Pre Economic Recovery Act Levels

Figure 2:  Senate and House compromise to return food stamp spending to pre-Economic Recovery Act levels

Annual savings of close to $1 billion are expected from the cuts to SNAP under the current bill.  An additional estimated $700 million/year is anticipated from the replacement of the former direct payment subsidy program by an expanded subsidized crop insurance program.  (Congressional Budget Office)

Approximately 47.5 million Americans receive some food stamp benefits under SNAP, and an estimated 850,000 people will lose on average $90 per month under the current Bill.  The food aid reductions enacted will return benefits to levels close to provided in 2008 prior to the boost in benefits enacted under the Economic Recovery Act Increases.  While the reduction in food stamp spending is

Food Stamp Benefits Have Wide Distribution and Impact Across States

Figure 3:  Food Stamp benefits have wide distribution among households in all states

far below the $40 billion the Republican-controlled House had sought, it is above the $4.5 billion targeted by the Democratic-led Senate.   Anti-hunger advocates remain worried about the impacts of this reduction on Americans in need.

For the crop insurance portion of the Farm Bill, under the former direct payment program the federal government paid $5 billion/year to farmers regardless of need. The 2014 Farm Bill eliminates direct payments and expands the federally subsidized crop insurance programFarmers will pay an insurance bill every year and will only receive support from that insurance in years when commodity prices fall or when unexpected weather disasters occur. The federally subsidized crop insurance program will pay 62% of farmer’s insurance premiums.

Pongamia, Terviva's new BCAP eligible crop growing in unproductive citrus acres in Florida

Figure 4:  Pongamia, Terviva’s new BCAP eligible crop growing in under-productive citrus acres in Florida

Among provisions under “everything else”, the Farm Bill provides incentives for biochemicals and biobased product manufacturing for the first time, including a tiered application process for the Rural Energy for America Program, and specifying eligible projects under the Biomass Crop Assistance Program(BCAP)

The Farm Bill contains a number of provisions that favor special interests.  For example, the Department of Agriculture is barred from renegotiating lower payments to qualified insurance providers over the five-year lifespan of the Farm Bill.  In previous years, the Agriculture Department’s renegotiations with insurance companies have saved the government billions of dollars.  In another instance, catfish inspections have been singled out for a new $20 million inspection office within the Department of Agriculture.  Furthermore, consumers groups won out

Figure 5:  Country of origin labeling will continue under 2014 Farm Bill

Figure 5: Country of origin labeling must continue

against meat producers with a provision that requires meat producers to continue labeling their products with country of origin. The meat industry had complained that the rule is too onerous and lobbied heavily to eliminate such a labeling provision.  (USA)

The Farm Bill also addresses a host of other issues and programs which are critical to the future of agriculture, food systems and rural communities including: the environmental impacts of farming, conservation, agricultural industry structure, trade policies, food and agricultural research, and the vitality of rural economies.

While individual stakeholders may object to individual provisions, the bill does provide certainty for American farmers, ranchers, and consumers for another five years. Farm groups seem generally favorable about the bill and its passage (for example, see  recent Farmers Advance article)

Below is a more detailed list of specific provisions within the 2014 Farm Bill.

(Farm bill summary), and all 959 pages of the text of the bill can be viewed on the Congressional legislation website (2014 Farm Bill full text)

Farm Assistance Provisions:

  • Repeal Direct Payments and limit protective risk management to situations where significant losses are suffered.
  • Reduce payment limits,  tighten eligibility rules, and streamline means tests to make farm programs more accountable.
  • Strengthen crop insurance to ensure farmers invest in their own risk management.
  • Offer dairy producers a new, voluntary, margin protection program without imposing government-mandated supply controls.
  • Reauthorize and strengthen livestock disaster assistance.
  • Support small businesses and new farmers and ranchers with training and access to capital.

SNAP or Food Stamp Provisions:

  • Close the “heat-and-eat” loophole that artificially increases benefit levels when states provide nominal LIHEAP assistance.
  • Establish a 10-state pilot to empower states to engage able-bodied adults in mandatory work programs.
  • Prohibit USDA from engaging in SNAP recruitment activities, and advertising SNAP on TV, radio, billboards & through foreign governments.
  • Ensure illegal immigrants, lottery winners, traditional college students, and the deceased do not receive benefits.
  • Ensure SNAP recipients are not receiving benefits in multiple states.
  • Prevent abuses such as water dumping to exchange bottles for cash.
  • Demand outcomes from existing employment and training programs.
  • Prohibit states from manipulating SNAP benefit levels by eliminating medical marijuana as an allowable medical expense.
  • Allow states to pursue retailer fraud through a pilot investigation program and crack down on trafficking through data mining, terminal ID, and other measures.
  • Increase assistance for food banks.

Miscellaneous Provisions:

  • Consolidate 23 duplicative and overlapping conservation programs into 13.
  • Provide one year of full funding for the Payment In Lieu of Taxes (PILT) program, funding vital services in communities containing federal lands.
  • Provide certainty to forest products industry by clarifying that forest roads should not be treated as a point source under the Clean Water Act.
  • Create a permanent subcommittee within the EPA Science Advisory Board to conduct peer review of EPA actions that would negatively impact agriculture.
  • Eliminate duplicative reporting requirements for seed importers; requires improved economic analysis of FDA regulations.
  • Fund specialty crop industry priorities such as Specialty Crop Block Grants.

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