NACD’s Take: The 2018 House Farm Bill

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By Coleman Garrison, NACD Director of Government Affairs

On Thursday, April 12, the House Ag Committee released its 2018 Farm Bill (H.R. 2) and the legislation passed out of Committee on Wednesday, April 18. NACD staff have been busy analyzing the bill to see how our priorities fared. Many of our requests were incorporated into the bill and we look forward to working with the Committee and Congress to make further improvements as this process moves forward.

Outlook

H.R. 2 passed out of committee on a straight party line vote. The two parties were not able to reach agreement on proposals regarding nutrition programs in this bill. While we feel there is more work to be done to improve the Conservation Title, it will be necessary for the two parties to reach agreement on the nutrition programs in order for a bipartisan bill to advance. Even with the tension over nutrition programs, the bill passed out of Committee. Afterwards, it will be debated, amended, and voted on by the full House of Representatives, although there is concern that without bipartisan support, the bill may not pass the House of Representatives due to opposition by Democrats to nutrition provisions and general opposition to USDA farm programs by more conservative Members of the House. Concurrently, the Senate is also writing its own version of the Farm Bill, which we expect will be released in the coming weeks. The final bill that is passed into law will have to be a product of compromise between the two chambers.

NACD Priorities

Key NACD requests that were included in the bill include:

• Repeals the SAM/DUNS registration requirements for conservation program participants.
• Continues the existing conservation compliance requirements for producers using crop insurance.
• Authorizes acequias to be eligible for the Environmental Quality Incentives Program (EQIP).
• Eliminates the donor program funding from the Regional Conservation Partnership Program (RCPP) and avoids other major changes to the program. RCPP would now have dedicated funding at about the same level as the current farm bill.
• Provides robust funding for the Watershed Programs including the Watershed and Flood Prevention Operations Program and the Small Watershed Rehabilitation Program.
• Increases the Conservation Reserve Program (CRP) acreage cap without taking funding from working lands programs.
• Allows for grazing or natural disasters to serve as mid-contract management on CRP acres.
• Creates the opportunity to use EQIP in the final year of a CRP contract.

Conservation Title Funding

Compared to the Congressional Budget Office (CBO) baseline which was released on April 9, CBO estimates this proposed farm bill would increase conservation spending (outlays) in the first five years after enactment by $650 million. By the end of ten years, conservation funding will have sustained a reduction of $795 million from the level we would expect if the 2014 Farm Bill was simply extended.
There are several reasons for this decrease in funding and competing arguments for what is more important. One line of thinking is that in 5 years, Congress will most likely be writing a new farm bill anyway, so the first 5 years is really what is most important to look at. Additionally, some may argue that CBO’s calculated estimates do not give the Committee “full credit” for the actual budget authority the legislation provides because of estimates CBO makes that NRCS will not be able to actually spend all EQIP dollars.

This being said, most observers of federal spending utilize COB’s 10-year window when reviewing legislation and it is what past farm bill’s have been judged on. The CBO score shows that most of these reductions in funding come from the merging of the Conservation Stewardship Program (CSP) into EQIP. While the new combined EQIP would see a significant increase in funding, from $1.75 billion in FY 2018 to $3 billion in FY 2023, it is less than what the two programs would be funded at individually over ten years.

EQIP/CSP Merger

Although EQIP is simple to understand and has broad and vocal support, CSP is generally viewed as more confusing and there is a general concern that farmers do not understand the requirements to get in the program. There is also some concern that the “greater level of conservation” a farmer must accomplish perhaps doesn’t really accomplish new conservation. EQIP would now offer either cost-share practices or new stewardship contracts meant to replace the traditional CSP contracts. Existing CSP contracts would not be altered and would continue to be paid out.

Largest differences between CSP and new stewardship contract include:

• Removes the requirement that two resource concerns be met before being eligible for a stewardship contract.
• Sets the term of these contracts to be no less than five years and no more than 10 years. The new stewardship contracts would still provide a long-term contract, in contrast to the traditionally shorter contract EQIP provides.

o Keeping access to a longer option contract is a priority for NACD.

• Ends the requirement that a producer’s entire operation to be enrolled in the contract.

o NACD views this as a positive reform to help provide flexibility to the program.

• Authorizes the Secretary to identify priority resource concerns within a State by working with State Technical Committees, their subcommittees, and Local Working Groups to identify these priorities.

o NACD appreciates the emphasis on local control over priority resource concerns.

• Funds new merged EQIP and CSP program at $2 billion in FY19, $2.5 billion in FY20, $2.75 billion in FY21, $2.935 billion in FY22 and $3.0 billion in 2023.

o This change moves CSP from an acreage to a dollar-based program.

Conservation Reserve Program

Chairman Conaway gave Ranking Member Peterson latitude to increase acreage in CRP as long as it didn’t increase spending. One of NACD’s priorities was to provide for increased acreage, but not at the expense of other programs. By the end of this farm bill, CRP acreage would increase to 29 million acres from the current cap of 24 million acres while not requiring additional funding than is in the current farm bill.

This would be accomplished be implementing the following:

• Caps the rental rates at 80% of the county rental rate with further reductions in subsequent reenrollments.
• Reduces the cost-share from 50% to 40% of the cost of the practice. Cover establishment (seed) cost share would be limited to no more than 25%.
• Increases the grassland CRP cap to 3 million acres. These acres are traditionally much cheaper, and the legislation would require the cap be met.

o In the case where the Secretary cannot meet the 3 million acre cap, those acres below the cap may not be used for traditional CRP acreage.

Other changes to the CRP program include:

• Requires USDA to hold a general signup at least every other year and enroll acres in accordance with historical state allocation rates.
• Allows additional grazing opportunities including allowing grazing as a practice within Mid-Contract Management, a priority for NACD.
• Allows a landowner to forgo Mid-Contract Management if a natural disaster such as fire or hail accomplishes the same goals, a priority for NACD.
• Allows a landowner to enroll in EQIP during the last year of a CRP contract to prepare the land for cropping or grazing, a priority for NACD.
• Requires the Secretary to annually determine rental rates and requires these rental rates take into account the local farmland rental market.
Regional Conservation Partnership Program
• Reauthorizes and funds the program at $250 million per year in mandatory funding and repeals the 7% donor program funding, a priority for NACD. This is approximately the amount RCPP has received each year during the 2014 Farm Bill.
• Adds the authorities of CRP and PL-566 as covered programs and allows PL-566 to be used for the entire country not just Critical Conservation Areas.
• Calls for a simplified application process.
• Allows for an expedited program application process for renewals of previous projects that are performing well.

Other Conservation Provisions

• Funds the Agriculture Conservation Easement Program at $500 million annually.
• Authorizes $100 million per year for funding for the combined Watershed Programs – robust funding for these programs was a priority for NACD.

o The current Farm Bill only provided $250 million in total and was only available for Dam Rehabilitation.

• Authorizes a Feral Swine Eradication and Control Pilot Project and authorizes $100 million in mandatory funding.

Coleman Garrison is NACD’s Director of Government Affairs and can be reached with questions or comments at coleman-garrison@nacdnet.org.

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