WASHINGTON — Members of the Senate Agriculture, Nutrition and Forestry Committee quibbled last week over spending on crop insurance and ad-hoc disaster relief, previewing potential fights in the 2023 farm bill.
Legislators of both parties emphasized their support at a Thursday hearing for better funding programs that protect underserved producers, and accounting for future natural disasters in crop insurance negotiations.
“Farming remains one of the riskiest businesses, and farmers still need these tools,” said Democratic Michigan Senator Debbie Stabenow, chairwoman of the committee. “We need to work together to create a farm safety net that is responsive to the needs of all of our farmers.”
But Republican members of the committee raised concerns about the amount of recent spending on emergency aid. The committee’s ranking member, John Boozman of Arkansas, said authorized farm bill programs formed a better safety net than ad-hoc aid.
“We owe it to all Americans to ensure the bottom does not fall out of agriculture,” Boozman said. “We cannot only focus on certain programs and not others when all farm bill programs are necessary to achieve economic sustainability for our farmers, ranchers and rural communities.”
The federal farm “safety net” is a collection of policies that provide billions of dollars worth of annual risk protection and income support to American farmers. The programs protect producers from the financial impacts of poor growing seasons, low market prices and disaster relief.
From 2018 through 2021, average annual expenditures included $8.9 billion for the federal crop insurance program, $660 million for the standing disaster assistance programs, and $5.7 billion for the commodity support programs.
If continued into the next farm bill, the Congressional Research Service estimates combined spending on the federal crop insurance, agricultural commodity support and agricultural disaster programs would be $13.4 billion annually during the next 9 years.
The USDA also administered more than $65 billion in ad-hoc farm aid from 2019 through 2023, to help farmers navigate trade wars, natural disasters, and the COVID-19 pandemic.
Assessing the net’s impacts
USDA Under Secretary for Farm Production and Conservation Robert Bonnie, Farm Service Agency Administrator Zach Ducheneaux, and Risk Management Agency Administrator Marcia Bunger briefed the panel on the current state of farm aid programs.
Bonnie said the FSA has processed more than 350,000 applications totaling more than $8 billion in payments to livestock and crop producers to help offset losses from 2020 and 2021.
He added that the omnibus spending bill passed last year will allow for close to $10 billion annually of USDA ad-hoc relief in 2023, similar to recent years.
Bonnie said that crop insurance still remains a “vital tool” for producers, and the department has made efforts to expand crop insurance options in a greater range of options.
Bunger spoke to the necessity of expanding high-quality crop insurance policies to specialty and organic crop producers, along with smaller operations.
“My husband and I have been farming together for the last 40 years, and in the last 27 years, crop insurance has been a cornerstone of our operation,” Bunger said. “It’s a passion of mine that all of these growers, whether they are beginning farmers, whether they are veterans, that they have the same kind of policy my husband and I have used.”
Increasing equity, access to protection
Stabenow asked Bunger about how the Risk Management Agency plans to bolster options for specialty crop producers.
Bunger responded that the agency has been hosting stakeholder meetings across the country, and has worked to ease the application process and lower requirements for insurance plans for small-scale farms.
Democratic Sen. Tina Smith of Minnesota asked how the farm bill could improve access to credit and insurance programs for farmers of color.
Ducheneaux replied that a culture shift must take place within the agency, adjusting tests of credit, using Inflation Adjustment Act resources to make loan modifications and lowering barriers like excessive paperwork.
“We should look to be the lender of first opportunity, as opposed to the lender of last resort,” Ducheneaux said.
Sen. Ben Ray Lujan, a Democrat from New Mexico, expressed concern about a lack of eligibility for some drought-stressed New Mexico farmers to receive prevented plant payments due to the Trump administration’s “one-in-four” rule. This rule states that agricultural land must be planted, insured, and harvested in one of the past four years to receive prevented plant compensation.
“We have come to hear from groups stakeholders that we maybe didn’t have all of the conversations that we needed to have,” Bunger replied. “One in four is very regionalized in a lot of cases. And so for this coming year, we’ve made an exception for several Western states to step outside of that one-in-four.”
Bunger noted New Mexico will be receiving one of these waivers.
Planning for disaster in the farm bill
A number of senators spoke to the imbalance of farmer aid resources between the farm bill and ad-hoc programs, voicing concerns over inequity and wasteful spending. Ad-hoc farm payments to farmers have dwarfed crop insurance payments, $70 billion to $3 billion, during the last 6 years.
“The reality suggests the existing safety nets need to be enhanced, and that we must find a better way to more quickly deliver relief to producers,” Boozman said.
Sen. Chuck Grassley, an Iowa Republican, noted that the crop insurance title of the farm bill is one of the most heavily funded. He asked if there is any way to better set up crop insurance to mitigate the need for ad-hoc funding.
Bonnie noted that reducing paperwork is key to ensuring that existing disaster programs in the farm bill get rolled out quickly, along with expanding access to crop insurance and the Noninsured Crop Disaster Assistance Program.
Still, Bonnie noted that while the USDA structures their ad-hoc programs to recruit enrollees into the crop insurance and disaster assistance programs, there is growing interest in the ad-hoc programs among producers.
“I think our job on the implementation side is to get those out as efficiently and quickly as we can to help our producers,” Bonnie said. “We’re open to discussion.”
Addressing foreign ownership
Republican Sen. Joni Ernst of Iowa asked, in light of the recent Chinese suspected spy balloon incident, if Congress can use the farm bill to modernize the Agriculture Foreign Investment Disclosure Act.
Bonnie said that monitoring and disclosing of foreign agriculture investments to the USDA is a “paper-based process,” and the department lacks enforcement tools to enforce oversight of that paperwork.
Republican Sen. Mike Braun of Indiana asked if the USDA would commit to blocking purchases of land from countries like China, Iran, North Korea and Russia.
Bonnie said that he would not commit to blocking purchases, but offered technical assistance on drafting the legislation.