On July 24th, Agriculture Secretary Perdue announced a $12 billion package to help farmers whose incomes have been impacted by the imposition of retaliatory tariffs on their products.  Few details were provided on how this package would be implemented.

Effective July 6th, the governments of the United States and China ratcheted up their trade disputes, with each country imposing $34 billion worth of tariffs on each other’s exports in nearly simultaneous fashion.  As anticipated, China’s tariffs are heavily focused on agricultural products, with the government of China explicitly targeting products produced in U.S. regions and states that were supportive of the President in the 2016 elections.  Other countries, such as Mexico, Canada, and the EU have also imposed retaliatory tariffs on U.S. agricultural products over the last few months.

This blog describes the portions of the House farm bill not included in last week’s blog–titles covering trade, rural development, credit, agricultural research, forestry, horticulture, and miscellaneous issues

This week, I will describe the key provisions in the other seven titles of the version of the farm bill marked up in the House Agriculture Committee on April 18th.  While provisions in these titles (trade, credit, rural development, agricultural research, forestry, horticulture, and miscellaneous), only command a small share of the mandatory resources at the disposal of the House and Senate Agriculture Committees, they are nonetheless important in shaping how farmers, rural communities, land grant universities, and foresters will interact with the federal government over the next five years.

The House Agriculture Committee marked up a farm bill on April 18, reported out of Committee on a party line vote.  This blog describes key changes to the four largest titles:  nutrition, commodities, crop insurance, and conservation.  

Rep. Mike Conaway (R, TX), chairman of the House Agriculture Committee, held a mark up of his draft farm bill on Wednesday, April 18th.  During his press conference to launch the bill on April 12, he described the bill as ‘bipartisan except for one title,’ but the changes to the Supplemental Nutrition Assistance Program (SNAP) that he is proposing have generated strong opposition from the Democratic members of the House of Representatives as well as nutrition advocates from outside of Congress.  That attitude was reflected in the motion to report the bill out of Committee yesterday, which passed on a party-line vote of 26-20.  It is quite clear that Mr. Conaway will be relying largely on Republican votes when he tries to get his bill through the House floor later this spring.

The President’s FY19 budget would cut discretionary USDA funding by 28 percent, with significant cuts to international food aid, agricultural research, rural infrastructure, conservation technical assistance and farm and business loan and grant programs.

On February 12, the Office of Management and Budget (OMB) released the details of the proposed budget for fiscal year 2019 (FY19) of the Trump administration, the second since the current President took office.  Overall, the budget proposes to spend $4.4 trillion in the upcoming fiscal year, generating a projected budget deficit of $984 billion, a 34 percent increase over the size of the deficit in FY17.  These figures do not include the cost of the Bipartisan Budget Act of 2018, which I described in a blog posted on February 20th, which will substantially increase the deficits for both FY18 and FY19.

In addition to the discretionary cuts to USDA funding described in last week’s blog, the President’s FY19 budget also proposed $254 billion in cuts over ten years to programs in the four main titles of the farm bill, nutrition, crop insurance, commodities, and conservation.

In addition to proposing to reduce USDA’s discretionary spending by several billion dollars in fiscal year 2019, the Trump administration also proposed to make significant cuts to a variety of key farm bill programs that spend money on a mandatory basis, primarily in the areas of nutrition assistance, commodity support, crop insurance, conservation, and trade promotion.   Congress is not obliged to adopt the Administration’s proposals on either discretionary or mandatory spending levels, and most budget experts believe that Congress is unlikely to seriously consider most of them.  However, they do reflect a willingness to make such cuts, and raise questions about whether the President will sign or veto a future farm bill if it comes to his desk with funding for such programs largely intact.

The Senate farm bill, S.3042, has been placed on the calendar for consideration this week, with a cloture vote scheduled for late on Monday, June 25th.  Given the nearly unanimous vote for the bill coming out of the Agriculture Committee, the legislation is expected to easily obtain the 60 votes needed for floor debate to ensue.The CBO score for the bill was released last Friday, and it contained few big surprises. As with the House bill, the Senate bill is effectively budget neutral over the ten-year scoring period, actually saving $107 million.  There is an unexpected savings of $2.3 billion over ten-years from a provision in the Rural Development title which allows cooperative lenders to underwrite loans for rural utility infrastructure, including electricity generation.  Overall, the trade, research, energy, horticulture, and miscellaneous titles receive modest net increases in mandatory funding over ten years, and the rest are either budget neutral or experience slight decreases in mandatory funding.