Page 52 - Farm Bill Series_The 7 Things You Should Know

-National Organic Certification Cost Share Program, which subsidizes the cost of farmers
who want to get certified as organic. The program was funded at $11.5 million a year through
FY2018.

The seven energy programs without baseline beyond FY2018 include Biorefinery Assistance,
which was provided with $200 million, and the Biomass Crop Assistance Program, which was
funded at $125 million. Funding for the energy title has been a top priority for Debbie Stabenow,
the ranking Democrat on Senate Agriculture.

Where can lawmakers find additional money?

One way is for congressional leadership to put more money into the farm bill, as was done in
2002 and 2008. There is concern that the fiscal 2018 budget resolution could require a new round
of cuts in farm programs, which would make writing the farm bill even more difficult.

Here are some other options for lawmakers. Most have significant political downsides because
they could shift money from one group of stakeholders to another.

-Take care of cotton before the farm bill is written. Adding cotton seed to PLC legislatively
or by an action of the new agriculture secretary would create a baseline for cotton before
the Agriculture committees start writing the new farm bill.

Pros. This provides a funding stream without the need to take money from other programs.

Cons. Either the legislative or the administrative route will be difficult if the industry is required
to offset the cost, especially given that the cost of the payments has gone up while the value of
the potential offsets has fallen, under CBO’s new estimates.

-End the ARC program. There has been no public talk of doing this, but that hasn’t stopped
ARC’s supporters from worrying that ARC could be in the cross hairs. The reason it’s even a
possibility is because CBO analysts expect growers who are now enrolled in ARC to shift en
masse to PLC if the next farm bill allows them to do so. That’s because ARC payments under the
county revenue option (ARC-CO) are based on fluctuations from a five-year rolling average in
county revenue. Once the high price years of 2012 and 2013 are gone from the average, ARC
payments fall precipitously.

Pros: The savings could be used to fill the other demands for money, and most farmers are
expected to switch from ARC-CO to PLC, if Congress allows them to, according to CBO.

Cons: ARC retains strong support from the corn and soybean sectors, who believe it provides a
vital supplement to crop insurance when there are price spikes like the one caused by the 2012
drought. Killing the program also won’t save anything close to what the program paid out in its
first years. ARC-CO payments will peak this year at $5.9 billion before plunging to just $409
million by fiscal 2021, assuming farmers do switch en masse to PLC under the next farm bill.

-Reducing PLC reference prices. That would reduce the cost of the program, and free up
money that could be used to add cotton growers to the plan. Wheat, peanut and rice growers
would presumably have the most to lose. PLC is expected to pay out $3.7 billion in fiscal 2018,
with $1.6 billion of that going to wheat growers, $926 million to rice farms, and $544 million to
peanut producers.
50 www.Agri-Pulse.com