The proposed 2018 House Republican farm bill would amend and extend some of the nation’s major programs for income support, food and nutrition, land conservation, trade promotion, rural development, research, forestry, horticulture, and other miscellaneous programs administered by the U.S. Department of Agriculture for five years through 2023.
The Congressional Budget Office estimates that enacting the proposed House farm bill would increase net direct spending by $3.2 billion over the 2019 to 2023 time frame and by $500 million over the 2019 to 2028 period, relative to CBO’s baseline projections. As specified in law, those baseline projections incorporate the assumption that many expiring programs continue to operate after their authorizations expire in the same manner as they did before such expiration. The cost of extending those authorizations through 2023 would total $387 billion, but because they are already included in the baseline, those costs are not attributable to this bill. CBO also estimates that enacting the bill would increase revenues by $500 million over the 2019 to 2028 period.
In addition, the bill would authorize the appropriation of specific amounts, mostly for a wide variety of existing and new USDA programs. Assuming appropriation of the specified amounts, CBO estimates that implementing those provisions would cost $24.3 billion over the 2019 to 2023 period.
Because enacting the House Republican bill would affect direct spending and revenues, pay-as-you-go procedures apply.
CBO estimates that enacting H.R. 2 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2029.
The bill would impose intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act. In the aggregate, CBO estimates, the costs of mandates on public entities would exceed the annual threshold established in UMRA for intergovernmental mandates ($80 million in 2018, adjusted annually for inflation) in at least four of the first five years that the mandates were in effect. The costs of mandates on private entities would be below the annual threshold established in UMRA for private-sector mandates ($160 million in 2018, adjusted annually for inflation).
Combined with the estimated spending under the April 2018 baseline projections for those programs, CBO estimates that enacting the bill would bring total spending for those USDA programs to $430 billion over the 2019 to 2023 period and $868 billion over the 2019 to 2028 period.
Farm bill budget by major titles
Under Title I, Commodities, the bill would reauthorize and amend the farm commodity support programs administered by USDA through 2023. CBO estimates that enacting Title I would increase direct spending by $200 million over the 2019-28 period. It would reauthorize the two main commodity programs—Price Loss Coverage and Agriculture Revenue Coverage—through 2023. Under PLC, producers receive payments when the annual average market price falls below the reference price set in law.
Under ARC, producers receive payments when a county’s average revenue for a crop (the product of price and production) falls below the county’s historical average revenue. Producers may receive payments from only one of those programs for the five- year period, and because of recent market prices and yields and program changes in the bill, CBO expects most producers to choose PLC.
The bill would modify the calculation of PLC benefits and redefine the reference price to allow an escalation during periods of relatively high historical commodity prices.
In addition, producers in areas subject to severe drought during the 2008 to 2012 period would be allowed to update the yield used to calculate PLC benefits. Finally, participants who did not plant an eligible crop on their farm during the 2009 to 2017 period would not be permitted to receive federal payments on those program acres in the future. As a result of those changes, CBO estimates that PLC payments would increase by $400 million over the 2019 to 2028 period and ARC payments under section 1117 would fall by $300 million over the same period.
Title II, Conservation, would reauthorize and modify land conservation programs administered by USDA. CBO estimates that enacting those provisions would result in a net reduction in spending of $0.8 billion over the 2019 to 2028 period.
Significant changes in conservation programs include:
Increasing annual funding for the Environmental Quality Incentives Program from $1.8 billion per year under current law to $3.0 billion per year by 2023, for a total increase in spending of $7.7 billion over the 10-year period;
Increasing annual funding for the Agricultural Conservation Easement Program and Regional Conservation Partnership Program; for a total increase in spending of $3.5 billion over the 2019 to 2028 period;
Increasing funding for small watershed rehabilitation by $0.1 billion per year for the 2019-23 period and by $0.1 billion for the Feral Swine Eradication and Control Pilot Program along with other provisions, for a total cost of $0.6 billion over the 2019-28 period; and
Repealing the Conservation Stewardship Program beginning 2019, which would reduce spending by $12.6 billion over the 2019 to 2028 period.
Title III would reauthorize USDA’s Food for Progress program and consolidate four other market development programs into a single program. The Market Access Program, the Foreign Market Development Cooperator Program, Technical Assistance for Specialty Crops, and the E. (Kika) De La Garza Emerging Markets Program would be combined into the proposed International Market Development Program. CBO estimates that spending under the combined program would increase by $450 million over the 2019 to 2028 period.
Title IV, Nutrition, would reauthorize the Supplemental Nutrition Assistance Program and related nutrition programs through fiscal year 2023 and make several changes to those programs. CBO estimates that enacting title IV would increase direct spending by $1.8 billion over the 2019-23 period and by $500 million over the 2019-28 period. It also would increase revenues by $0.5 billion over the 2019 to 2028 period.
Title V, Credit would reauthorize farm ownership and operating loans and loan guarantees through 2023. It also would increase lending limits on loan guarantees for farm ownership and operating loans, reauthorize individual development accounts for beginning farmers and ranchers through 2023, and amend farm ownership eligibility requirements for loans to beginning farmers and ranchers.
Title V also would make technical corrections to the Consolidated Farm and Rural Development Act and to the Farm Credit Act of 1971 to bring the statutes into comportment with current USDA practices. CBO estimates that enacting title V would have no effect on direct spending; all of the effects on spending would be subject to appropriation.
Title VI, Rural Infrastructure and Economic Development, would eliminate the mandatory funding for USDA’s Biorefinery Assistance and Rural Energy for America Programs. CBO estimates that eliminating those programs would reduce direct spending by $517 million over the 2019 to 2028 period.
Title VII, Research, Extension, and Related Matters, would reauthorize the Organic Agriculture Research and Extension Initiative through 2023. CBO estimates that provision would increase direct spending by $150 million over the 10-year period. It would reauthorize the Beginning Farmer and Rancher Development program. CBO estimates that provision would cost $100 million over the 2019 to 2028 period.
Title VIII, Forestry, would reauthorize several programs aimed at restoring and conserving forest lands and would expedite certain management activities on lands administered by the Forest Service. CBO estimates that enacting title VIII would not affect direct spending over the 2019 to 2028 period. All of the spending effects for this title would be subject to appropriation.
Title IX, Horticulture, would reauthorize specialty crop block grants through 2023. It would reauthorize programs to support organic agriculture. CBO estimates those provisions would cost $10 million over the 2019 to 2028 period.
Title X, Crop Insurance. CBO estimates that the amendments to the federal crop insurance program would reduce spending by $200 million over the 2019 to 2028 period. Those amendments would expand insurance coverage of forage and grazing lands, impose higher administrative fees for catastrophic coverage, and a reduce funding for research, development, and education assistance.
Title XI, Miscellaneous, would authorize USDA to operate a new National Animal Disease and Preparedness Response Program, to include a vaccine bank for rapid response to animal disease outbreaks. CBO estimates that enacting that provision would cost $450 million over the 10-year period. It would combine the Pima Cotton Trust Fund, the Wool Apparel Trust Fund, and the Wool Research and Promotion Fund into a single Textile Trust Fund that is authorized through 2023. CBO estimates the outlays from the combined fund would total $103 million over the 2019 to 2023 period. In total, enacting the provisions of Title XI would cost $566 million.
Larry Dreiling can be reached at 785-628-1117 or [email protected].
