Ag Relief Package Details Released
OMAHA (DTN) -- Congress on Tuesday released the details of a disaster package that includes nearly $31 billion overall for farmers.
The year-end funding bill congressional leaders released includes nearly $21 billion to help farmers recovering from natural disasters and another $10 billion in economic aid to crop producers.
Congress late Tuesday released the full bill text of a Continuing Resolution, or CR, to fund the federal government through March 14. The bill adds roughly $100 billion overall for disaster aid.
The bill also includes a one-year extension of the 2018 farm bill through the end of September.
In another provision, the bill solves a major demand problem for the ethanol industry by tweaking language to allow year-round sales of E15 nationally.
Zippy Duvall, president of AFBF, said thousands of farmers had reached out to Congress in recent days to include aid in the bill.
"There is no doubt in my mind that for many farmers, the critical funding in this bill could make the difference between planting a crop next year and giving up," Duvall said. "We appreciate that members of Congress rolled up their sleeves to ensure farmers can continue to deliver the safest, most affordable and abundant food supply in the world."
Rob Larew, president of the National Farmers Union, called on congressional leaders to pass the legislation. He also urged his members to keep up pressure on lawmakers.
"Family farmers and ranchers cannot afford any more delays, and frankly, neither can the rest of the country. Congress must see this deal through," Larew said. "Farmers don't get to walk away from their obligations; Congress shouldn't either. I urge Farmers Union members to stay vocal and keep the pressure on their elected representatives to get this done."
Republican lawmakers, especially in the House, were critical of both the spending and process behind the Continuing Resolution. Several conservative lawmakers on Tuesday said they would not back the bill.
ECONOMIC AID
The bill spells out how $10 billion in economic assistance available to farmers should be calculated. USDA will have 90 days after the bill becomes law to make one-time payments to a producer of an eligible commodity crop. The money would go to crops where the expected gross return per acre is less than the expected cost of production.
Under the details, USDA will use the projected farm price for the commodity contained in the "most recent World Agricultural Supply and Demand Estimates" published before the date the bill becomes law.
If the December WASDE were used, then the corn projected price is $4.10 a bushel; soybeans, $10.20 a bushel; wheat, $5.60 a bushel; and rice, $14.50 per cwt.
The price would be calculated by a 10-year-yield average for the crop, which is then compared to the national average cost of production for the crops based on a report published by USDA's Economic Research Service.
Producers would receive at least a payment equal to 8% of the reference price for the commodity, multiplied by the average payment yield for that commodity, and the number of eligible crop acres involved.
The payment to producers will be equal to 26% of economic loss of the commodity on the planted acreage of the farm for the 2024 crop year. Producers who were forced into prevented planting situations would receive a payment equal to 50% of the acreage that could not be planted.
Total payments are capped at $125,000 for farm operations that received less than 75% of their gross income from farming in the 2020-22 tax years. For producers who made at least 75% of their income from farming in those tax years, the maximum payment can go up to $250,000.
NATURAL DISASTERS
Overall, USDA will receive $30.78 billion to cover crop, livestock and horticulture losses. Beyond the economic aid, $20.78 billion would go to help with losses from an array of natural disasters in 2023 and 2024 -- droughts, wildfires, hurricanes, floods, derechos, excessive heat, tornados, winter storms, freeze events and excessive moisture.
Among those funds, $2 billion is set aside for livestock producers tied to losses in 2023-24 for drought, wildfires and floods. Assistance could go to the states as block grants and direct compensation to producers.
The bill also increases payments and losses covered under the Noninsured Crop Disaster Assistance Program (NAP).
Another $220 million is block granted to states to provide compensation to producers for crop, timber and livestock losses. This money would go to states that had net farm income of less than $250 million in 2023, fewer than 8,000 farms and average farm size of fewer than 1,000 acres.
Under the Natural Resources Conservation Service, the Emergency Watershed Protection Program would receive $920 million. The Rural Development Disaster Assistance Program would receive $362.5 million.
FARM BILL EXTENSION
Certain programs such as the Dairy Margin Program are extended through Dec. 31, 2025.
The bill also provides funding for several USDA programs that do not have baseline funding or authorization without a new farm bill.
Some of those programs include the Foundation for Food & Agricultural Research; scholarships for 1890s institutions and the Urban, Indore and Emerging Agricultural Production Research and Extension Initiative.
IRA MONEY AT RISK
Sen. Debbie Stabenow, D-Mich., the retiring chairwoman of the Senate Agriculture Committee, said she was pleased economic aid was going to farmers, but she criticized Republicans for how it was done, calling it "political malpractice." Republicans resisted using $14 billion or so from the Inflation Reduction Act (IRA). Those funds for USDA conservation programs were tied to using climate-smart practices to reduce greenhouse gas emissions or sequester carbon.
The funding, if it had been rolled into the extension of the farm bill, would have paid for the $10 billion in economic aid, Stabenow noted. The funds also could have added nearly $20 billion to the baseline spending allowed for the next farm bill, Stabenow said.
"Let me be clear. The $10 billion investment in economic disaster assistance that we agreed to is being paid for by increasing the deficit," Stabenow said. "It could have been fully paid for by using the $10 billion in savings from moving the conservation dollars into the farm bill baseline. While I am relieved that we reached an agreement, it's shocking that Republican leadership failed to support such a commonsense and bipartisan proposal."
The Union of Concerned Scientists also noted the move puts those IRA dollars at risk of being lost if the next Congress repeals the IRA. The group pointed out extreme weather driven by climate change and fossil fuel use leaves farmers vulnerable.
"If Congress really wanted to make farmers more economically resilient while also investing in the stability of our food system, they should do two things: give farmers the tools to better withstand and recover from extreme weather and persuade the incoming administration not to start new trade wars," said Melissa Kaplan, senior manager of government affairs for the Food and Environment Program for UCS. She added, "Across the country, 80% of people support helping farmers proactively adapt and protect their land and crops against flooding and drought, rather than waiting and paying for losses after the fact."
15% ETHANOL IN PUMPS YEAR-ROUND
The bill essentially changes the long-standing battle within ethanol groups and EPA over Reid Vapor Pressure. EPA has stuck to its guns sticking to the 10% Reid Vapor Pressure (RVP) standard for fuel additives. The act simply raises the RVP standard from 10% to 15%.
That change in language will allow retailers to sell E15 throughout the year without having to request waivers.
"Legislation to ensure year-round availability of E15 in the U.S. has been at the top of our to-do list for a very long time," said Brian Jennings, CEO of the American Coalition for Ethanol. Jennings added, "Inclusion of this provision will drive demand for homegrown, low-carbon ethanol, tackle inflation by delivering savings at the pump for consumers and strengthen America's energy security. We are deeply grateful to the senators and representatives who fought tirelessly to make this happen."
REPUBLICAN AG LEADERS CITE NEED
Agricultural leaders in Congress highlighted the need for economic aid to producers and the urgency of getting a farm bill completed.
"Farmers, agricultural lenders, and rural community leaders clearly communicated the need for emergency assistance to survive current market conditions," said Sen. John Boozman, R-Ark., who will chair the Senate Agriculture Committee next year. "The consequences of ignoring the stark realities facing rural America would be devastating to farm families, American agriculture, and our nation's food security."
Rep. Glenn "GT" Thompson, R-Pa., who got a farm bill through committee but did not get a floor vote this past year, said he's looking forward to pressing farm-bill action next year and update the safety net for farmers.
"I appreciate the partnership of incoming-Chairman Boozman, as well as Members and stakeholders, all who quickly and effectively highlighted the needs in farm country," Thompson said. "These tireless efforts will lessen much of the stress for the men and women who fight to produce the food, fiber, and fuel that sustains our great nation."
Chris Clayton can be reached at Chris.Clayton@dtn.com
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