Citrus, cotton, dairy praise budget, National Sustainable Agriculture Coalition notes sequestration extension
February 12, 2018
Key citrus, cotton and dairy groups praised the budget bill Congress passed and President Donald Trump signed Feb. 9 while the National Sustainable Agriculture Coalition pointed out the bill also includes a two-year extension of sequestration that will mean less money for the next farm bill.
Florida Citrus Mutual said the budget deal would provide $2.36 billion to make direct payments to Florida producers who have suffered hurricane-related crop losses, with citrus growers expected to receive $760 million.
In a legislative summary, the Senate Appropriations Committee said "producers who purchased crop insurance or Noninsured Crop Disaster Assistance Program (NAP) on eligible crops will be allowed to recoup up to 85 percent of their losses. Producers who did not have crop insurance or NAP on eligible crops will be allowed to recoup up to 65 percent of their losses. Producers receiving payments will be required to purchase crop insurance or NAP policies on eligible commodities for each of the next two years."
Florida Citrus Mutual CEO Michael Sparks said the group wanted to thank the Florida delegation, particularly Democratic Sen. Bill Nelson, Republican Sen. Marco Rubio, Republican Reps. Tom Rooney, Dennis Ross and Lincoln Diaz Balart, as well as Gov. Rick Scott and Agriculture Commissioner Adam Putnam, both Republicans.
“The added resources established by the fixes to the MPP and LGM program help pave the way for final adjustments to the dairy safety net for the next five years as Congress crafts a new farm bill,” Jim MulhernNMPF President and CEO
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On cotton, the bill defines seed cotton as a covered commodity eligible for payments under the Agricultural Risk Coverage and Price Loss Coverage programs in Title I of the farm bill if farm incomes or prices fall. A spokeswoman for the National Cotton Council said seed cotton is defined as the combined cotton lint and seed, not just cotton seed.
"This measure will provide cotton producers and lenders some certainty as they prepare for the 2018 growing season," NCC Chairman Ronnie Lee said. "The new policy will help ease the financial burden as producers struggle to cover total costs."
Lee, a Georgia cotton producer, said the industry is particularly appreciative of Senate Appropriations Committee Chairman Thad Cochran, R-Miss., and House Agriculture Committee Chairman Michael Conaway, R-Texas, for their leadership.
The NCC also thanked House Agriculture Appropriations Subcommittee Chairman Robert Aderholt, R-Ala., and ranking member Sanford Bishop, D-Ga., House Agriculture Committee ranking member Collin Peterson, D-Minn., and Rep. Jodey Arrington, R-Texas.
In the Senate, NCC recognized Agriculture Committee Chairman Pat Roberts, R-Kan.; Senate Agriculture ranking member Debbie Stabenow, D-Mich.; Senate Appropriations Committee ranking member Patrick Leahy, D-Vt., and Sens. Jon Cornyn, R-Texas, John Boozman, R-Ark., and Richard Shelby, R-Ala.
"These members recognized the need for cotton policy that could stabilize our industry," Lee said. "They are keenly aware of the challenging financial situation that American cotton producers and their families have faced and continue to face."
Lee said the National Cotton Council worked for more than two years to get stabilizing policy in place in advance of the next farm bill "and we will continue to work with Congress and the administration to get a new farm bill enacted that will enable America's farmers and ranchers to continue producing the abundant and affordable food and fiber our nation and world has come to expect."
The dairy provisions are part of a spending package announced Feb. 7 by Senate Majority Leader Mitch McConnell, R-Ky., and Senate Minority Leader Charles Schumer, D-N.Y.
In a letter sent to McConnell, Schumer, House Speaker Paul Ryan, R-Wis., and House Minority Leader Nancy Pelosi, D-Calif., the National Milk Producers Federation outlined the difficult economic situation facing dairy producers, including declining milk prices and global export challenges.
The Margin Protection Program reforms included in the dairy package include:
» Raising the catastrophic coverage level from $4 to $5 for the first tier of covered production for all dairy farmers;
» Adjusting the first tier of covered production to include every dairy farmer's first 5 million pounds of annual milk production (about 217 cows) instead of 4 million pounds, a recognition of the growth in herd sizes across the country;
» Reducing the premium rates, effective immediately, for every producer's first 5 million pounds of production, to better enable dairy farmers to afford the higher levels of coverage that will provide more meaningful protection against low margins;
» Modifying the margin calculation to a monthly (from bimonthly) basis, to make the program more accurate and responsive to producers in difficult months;
» Waiving the annual $100 administrative fees for underserved farmers;
» Directing USDA to immediately reopen the program signup for 2018.
The disaster package also lifts the $20 million annual cap on all livestock insurance, including the Livestock Gross Margin program. This will allow USDA to develop a wider variety of additional risk management tools that will be especially important for larger dairy producers and can complement the MPP.
"We applaud Sens. Patrick Leahy and Debbie Stabenow for spearheading the badly needed reforms to the MPP, which will make the program a more effective safety net for dairy producers," said NMPF President and CEO Jim Mulhern. "These critical provisions are based on their proposal that was approved by the Senate Appropriations Committee last summer in a bipartisan vote. The reforms also reflect the assistance of Sens. Thad Cochran and Pat Roberts, as well as key members of the House."
"Similarly, we commend Reps. Mike Conaway and Collin Peterson for crafting important language to remove the existing cap on livestock insurance products, including the Livestock Gross Margin-Dairy program," Mulhern said. "This will give dairy farmers the opportunity to access a variety of additional risk management tools that can complement MPP, and it garnered bipartisan support from our Senate allies. Taken together, these changes will provide important risk management tools for dairy farm operations of all sizes."
"Assuming these dairy provisions — and additional funding for the cotton program — are approved as part of the budget deal, NMPF will then focus on working with the Senate and House agriculture committees on shaping the 2018 farm bill," Mulhern said.
"The added resources established by the fixes to the MPP and LGM program "help pave the way for final adjustments to the dairy safety net for the next five years as Congress crafts a new farm bill," Mulhern said.
Stabenow said the budget agreement will provide more than $1 billion in additional support for dairy farmers.
The National Sustainable Agriculture Coalition said in a blog post that the agreement sets the reference price for cotton at $0.367 per pound, but the cost is largely offset.
"While it has been reported that the cotton provisions amount to over $3 billion in new spending for the anticipated cotton payments, the cost has been mostly offset by by changing most so-called 'generic base acres' into seed cotton base acres and making seed cotton PLC participants ineligible for the special cotton Stacked Income Protection (STAX) crop insurance policy beginning in 2019," NSAC said.
Even though the budget includes wins for cotton and dairy and a net increase in the farm bill baseline of over $1 billion, it also includes an extension of sequestration for another two years, NSAC said. This will effectively reduce the farm bill baseline by over $1 billion, NSAC added.
Sequestration affects farm bill commodity and conservation programs, with the exception of the Conservation Reserve Program. For the five years of the 2018 farm bill (2019-2023), sequestration will decrease commodity and conservation payments to farmers by over $3 billion. The new budget deal extends sequestration through 2027, with the result that commodity and conservation payments will be reduced by over $6 billion over the next nine fiscal years, including the extra $1 billion plus added via the new budget deal. ❖