By TIM ALEXANDER
EAST PEORIA, Ill. — With negotiations for the 2023 Farm Bill on the horizon, several unanswered questions remain as to what agricultural programs, if any, might face a reduction in federal funding. A larger unanswered question is when negotiations for the 19th Farm Bill will actually get underway, according to University of Illinois agricultural economist Jonathan Coppess.
“Things have been a little interesting with the start of the 118th Congress so far,” Coppess told farmers and agribusiness professionals attending the Illinois Farm Economics Summit in East Peoria. “What this (means) for the farm bill, I do not know. It’s been a bumpy start.”
Coppess was referring to the House leadership nominations that stretched on for days before California Republican Kevin McCarthy was elected as the House Majority Leader, along with concern for the concessions McCarthy made to the Freedom Caucus and whether he has the ability to be a strong leader moving forward.
“Those 20 (Freedom Caucus) members have proven themselves to be willing to go to the very bitterest of ends to make whatever point they want to make on social media. How this will affect the farm bill, I wish I could tell you,” he said.
However, the U of I economist said he remains confident that a new farm bill will be in place before the end of September 2023, despite looming budget battles. The biggest issue affecting the success of the new farm bill will be the statutory debt ceiling, Coppess noted. “A fight over the debt ceiling is what disrupted the farm bill process in 2011. We’ll be watching this closely to see what happens,” he said.
A lot also depends on the amount of funding estimated for key farm bill programs by the Congressional Budget Office (CBO). In May of 2022, the CBO projected an outlay of $178 billion for mandatory farm bill programs in fiscal year 2022, but just $157 billion for 2023 and $126 billion for 2024. In May of 2023, these numbers will be revised by the CBO.
“There is currently a $1.2 to $1.3 trillion, ten-year baseline for these programs according to the CBO,” said Coppess. “What the CBO estimates is what the (House and Senate Agriculture) committees have to work with. That’s why it’s so important; the committees are required to stay in that spending range. If you want to increase spending on one title, you have to cut something else.”
Coppess expects the usual budget battles over outlays for federal crop insurance, the Supplemental Nutrition Assistance Program (SNAP), conservation programs and reference price levels for key farm safety net provisions. Due to supplemental and ad hoc disaster payments made to farmers by the government between 2018 and 2022, budget hardliners will be looking to reduce the outlay for disaster funding through the farm bill.
“We had never seen a scenario under any farm bill in history in which on top of the spending through farm bill programs we have added this level of ad hoc or supplemental disaster payments,” Coppess said, referring to the Market Facilitation Program and pandemic-related payments made to farmers and ranchers. “I’ll leave it to you to think about what this means politically. I don’t know; we’ve never seen this before.”
The economist predicts a likely showdown over funding allotted for Title II farm bill conservation programs due to unprecedented investments in conservation and climate made through the Biden Administration’s Inflation Reduction Act.
“The Inflation Reduction Act added roughly $18 billion to what we were already spending on conservation programs, with the legal authority to spend it through 2031. This is not in the farm bill baseline, but it is funding that (members of Congress) are looking at and asking ‘do we cut back and spend this money somewhere else?’ It is possible that in the budget rules they could eliminate this spending and use it somewhere else as an offset,” said Coppess.
Those tasked with writing the 2023 Farm Bill may consider a new farm support program payment trigger based on cost of production. Huge increases in farm input costs — some by as much as triple digits— have forced farmers to sell their products at higher prices to defray the increase in production costs. Payment triggers would vary by crop region, according to Coppess, though further details of the proposed program -- which would closely mirror federal policy that supported farmers during the Great Depression -- have not been fully worked out.
The 2023 Illinois Farm Economics Summit was held January 10 in Mt. Vernon, Jan. 11 in East Peoria and Jan. 12 in Dekalb. In addition to Coppess’ farm bill preview, U of I farmdoc team members offered presentations on topics including farmland prices, the 2023 U.S. grain market, expectations for the South American grain market and more.