2024 Farm Bill Basics and Legislative Overview

Description

This training provides background about the legislative process regarding the Farm Bill and CCL's focus and goals within our Healthy Forests policy agenda area for 2024. Outreach to the agriculture community can help cultivate allies and build support of the Energy Innovation & Carbon Dividend Act among farmers with farms of all sizes, agribusiness and consumers.

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TOC and Guide Section

Presenters
Greg Jason - CCL MN Statewide Teams Co-Leader, Agriculture & Forestry Action Action Team Member
Ben Pendergrass - CCL Vice President of Government Affairs

Note: this text includes information from both video modules of the training.

The Farm Bill Basics

What is the Farm Bill?

An omnibus, multiyear legislation that sets national agriculture, nutrition, conservation, and forestry policy (2018 Farm Bill was over 1,000 pages and included 12 Titles).

It’s updated on a 5 year cycle - 2018 bill expires in 2023.
Over a 10 year period it’s a 1.5 trillion dollar expenditure.
Focuses on mandatory spending (fixed for five years) instead of discretionary spending (funding which is appropriated annually)

What about the 2023 Farm Bill?

Bipartisan action is common for this legislation
Existing Farm Bill is generally thought to have a good structure
No pressure to make major changes
But budget is tight
Biggest fight over climate policy will be in the Farm Bill

Note: This cycle's Farm Bill was originally scheduled to be finalized in 2023, but it was given a one year extension until fall 2024. On November 16, 2023, President Biden signed into law H.R. 6363, the Further Continuing Appropriations and Other Extensions Act, 2024, which extended the Agriculture Improvement Act of 2018, more commonly known as the 2018 Farm Bill. This extension delayed the authorization of the 2023 Farm Bill, and allows current authorized programs to be funded through September 2024.

Farm Bill spending 2019 - 2023 (previous five year authorization): $428 billion

Most of the Farm Bill funding is for the nutrition program:

Nutrition assistance (SNAP) $325.8B (76%)
Conservation: $29.6B (7%)
Commodities support: $29.6B (7%)
Crop insurance: $38.5B (9%)
Other: $4.2B (1%)

New Farm Bill baseline for next five year period: $1.5 trillion - three times more than previous cycle - due in part to rising costs and inflation.

Background

Agricultural economic drivers include:

Economic incentives for farmers to change practices
Thin margins are common due to high input costs
Global marketplaces and trade policy are important - US is a net food exporter
The Farm Bill is an important tool to “de-risks” transition costs

Agriculture, a diverse economic sector, can be grouped into three buckets.

Commodity agriculture (corn, beans, wheat, etc.)
Specialty agriculture (fruit, nut, vegetables, organic, etc.)
Animal agriculture (protein)

For the purposes of this training we won’t be exploring the specific sector differences across each of these areas, but it’s instructive to know how policy design can impact each individually.

Discretionary vs. mandatory spending

Discretionary annual appropriations are authorized for other agriculture-related programs including Natural Resources and Environment (where the Forestry service sits). Discretionary spending programs only receive funding if Congress allocates it through the annual appropriations process.

Mandatory spending covers expenditures that are treated as entitlements, so the programs receive funding as needed from the Treasury as soon as Congress passes the Farm Bill.

Farm Bill & Forestry Budget (CCL supports the Healthy Forest Initiatives)

The projected mandatory spending for the Farm Bill 2024 - 2033 is $1,426B

The largest part by far is for nutrition assistance (SNAP): $1,205B
Crop insurance: $97B
Conservation (multiple programs): $57B
Commodities (multiple programs): $57B
Other: $10B

U.S. Forest Service funding is mostly discretionary. Of the Farm Bill spending of almost $1.5 trillion over ten years, mandatory spending for forestry is only $10 million.

However, when both mandatory and discretionary spending is factored in for 2024, for example, five percent goes to forestry, while 72 percent goes to nutrition.

Farm Bill Sign-On Letter

CCL is one of 644 organizations which submitted a letter in 2023 urging Congress to keep the IRA conservation funding as additional to the Farm Bill. Below is the beginning text:

“As you begin to consider the 2023 Farm Bill, the undersigned groups urge you to protect the historic $20 billion investment in climate-smart agriculture and conservation technical assistance and to ensure that this funding stays in climate-smart agriculture and Farm Bill conservation programs.”

CCL Updates

Where are we now in the legislative process? (as of February 2024)

Hearings - completed in 2023
Agricultural Committees
- currently underway

House and Senate Agriculture Committees each draft, debate, “mark up” (amend and change), and eventually pass a bill; the two committees work on separate bills that can have substantial differences.

Next Steps - normal process:

Full Senate and House - discussions
Conference Committee - reconcile the two bills
Full Congress - final vote
President Signs

Due to politics an alternate process may occur:

Senate may not release a bill in committee until they see a House bill.
House may bring partisan (Republican) bill to the House floor - it fails or passes,
Even if it passes, the House may then have to write a bipartisan bill that has Democratic votes
Then the Senate releases their bill. Hopefully it moves forward.
If not it will be postponed until the lame duck session or extended to 2025

Inflation Reduction Act (IRA)

The Inflation Reduction Act provides $19.5 billion over five years to support USDA’s conservation programs that yield climate change benefits. This is a significant and important addition to the $27 billion for conservation that is in the Farm Bill.

The IRA agriculture and conservation funding includes these major programs:

$8.45 billion: Environmental Quality Incentives Program (EQIP)

EQIP provides technical and financial assistance to agricultural producers and forest landowners to address natural resource concerns that are important for climate change mitigation like water quality, soil health, habitat for wildlife.

$4.95 billion: Regional Conservation Partnership Program

Provides grants to partner organizations, states, and communities for projects such as restoring a wetland.

$3.25 billion for the Conservation Stewardship Program

This program offers annual payments to farmers for implementing or maintaining conservation practices such as “no till.”

$1.4 billion for the Agricultural Conservation Easement Program

Helps farmers and ranchers, land trusts, and other entities protect, restore, and enhance wetlands or farmland by placing land in conservation easements, which prevents it from being developed.

$1 billion for Conservation Technical Assistance

This program provides farmers, ranchers and forestland owners with the knowledge and tools they need to conserve, maintain and restore the natural resources on their lands and improve the health of their operations.

CCL Focus and Goals

CCL’s main goal is to urge Congress to protect and build upon the $20 billion investment in agricultural conservation programs and conservation technical assistance that was included in the Inflation Reduction Act.

Already, there have been efforts to reallocate this funding to other programs in the Farm Bill like commodity subsidies.

This historic investment is imperative to supporting many oversubscribed conservation programs that provide farmers, ranchers, and forest-owners with voluntary tools to increase profitability, productivity, and support environmental improvements and practices that help mitigate the impacts of climate change.

These programs support farmers, ranchers and forest owners in all parts of the country. This funding should not be reallocated to benefit a small subset of producers in one part of the country.

Secondary asks and bills to watch

The Farm Bill is not like a normal bill in Congress, where members introduce it, it’s visible to everyone, and it gets co-sponsors. The Farm Bill is negotiated in the Agricultural committees and is a somewhat closed process.

One of the ways to influence the Farm Bill is through what are called “marker” bills, which are bills introduced in Congress to signal policy ideas and gather support for those ideas, most often with a goal of inclusion in an omnibus bill like the Farm Bill.

Here are two marker bills that CCL has selected for secondary asks: :

Increased Technical Service Provider Access Act of 2023 (S.1400 / H.R.3036)

The IRA provides almost 20 billion dollars in new money for conservation and climate programs. To be able to utilize that money farmers need access to Technical Service Providers who have the knowledge to Implement these programs. Legislation introduced in the House and Senate in May 2023 seeks to address a shortage of Technical Service Providers at the Department of Agriculture.

The USDA now has more conservation money than they’ve ever had to get into the hands of farmers. But they don’t have enough staff to help producers apply for funding and certify projects. This bill creates a streamlined certification process for Technical Service Providers (TSPs) to address TSP shortages and provide better service to agricultural producers. Technical Service Providers help farm producers deploy and manage conservation programs through one-on-one assistance. The USDA Natural Resources Conservation service projected the agency would need to hire between 3,000 and 4,000 employees to meet demand for technical assistance. This bill seen significant support from both sides of the aisle.

Specifically, the bill would help build the workforce by cutting red tape, streamlining Technical Service Provider certification requirements, and ensuring they are paid a market rate. The USDA would:

Create a “one-stop shop” website with information and resources for farmers, ranchers and foresters that want to monetize their soil health promoting practices by working with voluntary carbon credit markets.
Create certification programs which provide transparency, legitimacy, and informal endorsement of 3rd party technical assistance and verification providers (of carbon sequestered).
Partner with all stakeholders to remove barriers and difficulties and provide a report to Congress so that further policy action can be considered. Note there is a 1 year comment period provided for Agriculture community input after passage and before implementation methods are finalized.

Representative Abigail Spanberger, a Democrat from Virginia, and Senator Mike Braun, a Republican from Indiana, led the effort.

Seedlings for Sustainable Habitat Restoration Act of 2023 (S.1164 / H.R.5015)

Strategic Significance: Ensures capital for seedling supplies to keep pace with critical reforestation efforts.

Clarifies that funding from the Bipartisan Infrastructure Law is available to support the development of seedling nurseries at state forestry agencies, local private or non-profit entities, and institutions of higher education.

Bills to watch

Advancing Research on Agricultural Climate Impacts Act of 2023 (S.2241/H.R.5160)

Would require the Secretary of Agriculture to conduct research relating to measurement, monitoring, reporting, and verification of greenhouse gas emissions and carbon sequestration. For CCL, it’s particularly important to be able to accurately measure carbon sequestration as a result of conservation practices.

CROP for Farming Act (S.2564/H.R.5922)

Would add reducing emissions of nitrous oxide or methane or storage of carbon in plants or soil to the list of practices producers can receive financial assistance to adopt under EQIP Conservation Incentive Contracts.

What About the Growing Climate Solutions Act?

The Growing Climate Solutions Act (GCSA) was signed into law on December 29, 2022 as a bipartisan bill that helps farmers, ranchers, and forestry operators get paid by voluntary carbon markets to implement additional soil health practices into their operations. It does this by removing barriers to the use of voluntary carbon markets, so it is market-based mechanism. These practices can be an important carbon sink if implemented at scale, positively affecting our changing climate.

GCSA 2min video from CCL, featuring co-sponsor Senator Stabenow
GCSA Fact Sheet for Farmers describes the bill

The Growing Climate Solutions Act strengthened and improved access to voluntary carbon credits for farmers, ranchers, and private forest owners. CCL signed onto its supporter list when the bill was introduced in June 2021. That same month, 300 constituent-led lobby meetings led to the recruitment of over 40 new co-sponsors. In the week before the Senate vote, CCL made 10,500 constituent contacts to the Senate and published at least 15 op-eds. The bill passed the Senate on a vote of 92-8. When this bill stalled in the House committee, our government affairs and grassroots network continued to build momentum for it in the House via media, calls, and constituent-led lobby meetings. Finally, the bill was included in the 2022 Omnibus package.

Possible developments

Dynamics around the farm bill are fluid.
More action when bill text is released, like calls for action on amendments or to support provisions in one or another section of the bill.
For now, in February we’ll have a Climate Action Program action on the bill.

CCL Agriculture & Forestry Action Team

Educate CCLers about agriculture and agricultural policies in the context of climate change. There is a monthly call as well as a forum.
Engage farmers, ranchers, and foresters, as individuals or organizations, in climate solutions.
Collaborate with CCLers to generate LTEs and Op-eds to inform farmers, ranchers and agricultural organizations.
Provide resources for lobbying Members of congress who care about agriculture with handouts and resources for background and to answer questions about:
Energy Innovation and Carbon Dividend Act (primary ask)
Technical Service Provider Access Act (secondary ask)

Note: the information below is not included in the video training.

Agriculture, Climate Change, and a Carbon Fee and Dividend

The agricultural sector feeds the world. Climate change poses many challenges to the sector’s function and yield, as extreme weather events can cause catastrophic damages to crops, disrupt growing seasons, damage topsoil—all at a great financial cost to reinsurers who are increasingly faced with billion-dollar payouts [1] to cover such losses. Shifting climate patterns also change growing conditions, resulting in changes and threats to types and yields of crops across the country and, in particular, a significant challenge to water basins, where precious groundwater resources, already depleted, are further compromised as the world temperature rise induces increased rates of evaporation/transpiration.

The sector is one of the largest contributors to greenhouse gas emissions (10% of net emissions) and, yet, is a sector that can help reduce overall emissions through best practices. These changes involve energy, water and land management, improved crop selection, and approaches to soil preservation and restoration. Across the country, farmlands are now producing new, clean energy from wind and solar installations that create economic growth beyond agriculture, adding tens of thousands of clean energy jobs.

The USDA Census of American Agriculture, in its Farm Typology section, reports that there are 2,100,000 farms in the US. Of these, 97% are family farms, and 80% of the family farms are small family farms. Further, 20% of these small family farms have been purchased in the last ten years.

Small or big, private or public, corporate or non-profit, farmer or rancher, producer or supplier, grower or researcher we will include them all and look forward to our work together.

How will a carbon fee affect commodity agriculture?

Commodity farmers are “price takers not price makers”. For that reason the Energy Innovation and Carbon Dividend Act (EICDA) makes fossil fuels used on farms, chiefly diesel fuel for tractors and other equipment, exempt from the carbon fee.

Still, a recent paper [1] projects that a carbon fee with the pricing of the EICDA would cause a decrease in net returns in year 1 of 1.0% (corn) to 1.6% (soybeans) to 1.8% (wheat), and a decrease in net returns in year 10 of 6.3% (soybeans) to 8.1% (wheat) to 8.2% (corn). The primary reason for these decreases is due to fertilizer cost increases (fertilizer is energy intensive and uses natural gas as a feedstock).

It’s understandable that farmers would be wary of any policy that could have such impacts. But the year 10 projections assume no change in farmers’ practices or in the manufacture of fertilizer.

Many farmers use more fertilizer per yield than they have to, as shown by the reductions of 48 lbs/acre using a dynamic N management tool in corn [2]. And the soil health practices of no-till and cover crops saved farmers up to $50/acre on fertilizer [3]. The combination of N management and soil health practices can be a powerful way to reduce nitrogen fertilizer inputs while also being more resilient to droughts and downpours..

Fertilizer manufacturing is rapidly developing means of reducing or eliminating their emissions. The method that has been in commercial use the longest is Carbon Capture and Storage, where the carbon emissions enhance recovery of oil in “depleted” oil fields [4].

The fee starts low so that farmers and fertilizer manufacturers have time to transition. But if that’s not enough, ask what they would need to support this bill.

Sources:

1. Dumortier, J. and A. Elobeid. “Effects of a carbon tax in the United States on agricultural markets and carbon emissions from land-use change.” Land Use Policy 103:105320, 1-16 (2021) https://doi.org/10.1016/j.landusepol.2021.105320

2. Sela, S., H.M. van Es, N. Moebius-Clune, R. Marjerison, J. Melkonian, D. Moebius-Clune, R. Schindelbeck, and S. Gomes. “Adapt-N outperforms grower-selected nitrogen rates in Northeast and Midwestern United States strip trials. Agronomy Journal 108: 1-9 (2016) doi:10.2134/agronj2015.0606

3. “Soil Health Research” National Association of Conservation Districts. (2021) https://www.nacdnet.org/soil-health-research/

4. Commercial EOR Projects using Anthropogenic Carbon Dioxide. MIT Carbon Capture and Sequestration Technologies Program (2016) https://sequestration.mit.edu/tools/projects/index_eor.html

Length

Press play to start either Video 1: (33:10) Video 2: (35m 43s)

Video Outline

To skip ahead to a specific section go to the time indicated in parenthesis.

Video 1's Intro & Agenda (from beginning)
Farm Bill Overview (2:18)
Inflation Reduction Act: Conservation and Climate Money (12:09)
CCL's Focus and Goals (17:00)
Conclusion and Next Steps (28:45)

Video 2: Intro & Agenda (from beginning)
Overview of the Farm Bill''s Budget (2:57)
House & Senate Committees (13:56)
Policy Debates (21:00)
CCL Updates on the Technical Service Providers Access Act (28:27)

Instructor(s)

Ben Pendergrass
Greg Jason

Downloads

Audio length

Press play to start either audio podcasts

Audio embed code

Audio Outline

To skip ahead to a specific section go to the time indicated in parenthesis.

Instructor(s)

Ben Pendergrass
Greg Jason

Downloads

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Go Deeper

Join the Agriculture Action Team
Visit Business Climate Leader's Agriculture Sector page
In the fall of 2017 the Agriculture Action Team hosted the weekly “Agriculture at the Table” series (YouTube playlist).