By RACHEL LANE D.C. Correspondent WASHINGTON, D.C. — Since 2014, when the price paid for crops decreased, the only thing that has saved farmers financially is higher yields. As the low commodity prices continue, the chances of a bad yield increase and the need for a strong farm bill increases. Funding for some of the provisions in the 2014 farm bill is set to expire before the end of 2018. The economics of the next farm bill was the focus of a Farm Foundation meeting in Washington, D.C., last week. Farm income reached record highs in 2013. Those figures were taken into account with the farm bill finalized in 2014, but that year the price of most crops declined. In 2016, farm income was about 50 percent lower than it was in 2013, said Craig Jagger, formerly chief economist of the House Agriculture Committee and principal analyst with the Congressional Budget Office. “Farmers in many commodities are struggling with break-even,” said Don Villwock, corn and soybean farmer in Indiana and the former president of Indiana Farm Bureau. Most farms purchase large equipment with a five- or seven-year loan. The current figures farmers can give bankers make the bankers nervous, he said. Bankers are using projected figures for four years into the future to determine loans, because farmers wouldn’t get anything if the current numbers were used. Long-term planning isn’t just for machinery – farmers try to think about how to improve soil health, conservation, irrigation and drainage in coming years, too. “Because of climate variability, we’re trying to put in irrigation as quick as we can,” Villwock said of his farm. “We need some kind of safety net so we can move forward … We’re about out of that money we stockpiled during the good times.” He’s worried about the young, beginning farmers who didn’t have good prices to help them survive through the last few years. In addition to supporting young farmers, Villwock supports having food and nutrition programs in the farm bill. About 50 percent of the students in his local high school receive assistance, and Villwock thought his county was doing pretty well financially. “Thinking anyone, adult or child, is going to bed hungry is unacceptable to those of us in agriculture,” he said. He would like to see increased support for agriculture research. Funding for this has been decreasing in recent years, with no increases in funding for more than 20 years. With current funding measures, it takes 10 years before a disease or pest is identified and stopped. As a safety net, the farm bill is needed now more than ever, said Joe Outlaw, co-director of the Agricultural and Food Policy Center and professor of agricultural economics at Texas A&M University. Thirty percent higher yields than normal is the only reason farmers are breaking even; eventually, he pointed out nature will catch up. He said in the Senate and the House agriculture committees, every commodity has a champion. While everyone supports food assistance programs, that is an area that can impact Democrat votes needed to pass the farm bill. “I think this bill is going to get done this year,” Outlaw said. “There’s not so much money (for the farm bill) that they’re trying to make the plans. They’re just tweaking what they have.” The goal is to pass the farm bill by summer, but he said it probably won’t be finalized until after primary elections. |
