Policy & Markets

The Farm Bill Goes Way Beyond Farming

Congress decides what to support in the expansive legislation known as the Farm Bill.

In the next year, we will read and hear a lot more about the Farm Bill. Once passed, the legislation will impact how we raise food, fuel and fiber — and how much risk is involved in those enterprises.

While its name suggests it’s all about farmers, the expansive Farm Bill governs policy that includes farm income support, food assistance, conservation programs, trade and more. Its three main pillars are:While its name suggests it’s all about farmers, the expansive Farm Bill governs policy that includes farm income support, food assistance, conservation programs, trade and more. Its three main pillars are:

  • To help farmers survive the ups and downs of a risky business.
  • To feed the hungry.
  • To protect the environment.

The bill must be renewed on a regular basis — usually every five years — and is on the docket in 2023.

A Rich History

The first Farm Bill was created in 1933 as part of the New Deal. It provided subsidies to farmers during the Great Depression by paying them to stop producing seven main crops in the hopes of decreasing supply, and thus increasing prices, of those crops. The bill also contained provisions related to conservation and support for farmers suffering from the effects of the Dust Bowl.

While the core elements of early farm bills were farm support and conservation programs, a major change occurred in 1973 when Congress added food assistance programs. That change was authored by well-known senators Bob Dole (R-KS) and George McGovern (D-S.D.) — both from big ag states and both prominent supporters of anti-hunger programs.

The senators married these programs because they needed a way to sway urban lawmakers to support a bill that historically benefited rural America. In turn, expanding the Farm Bill encouraged rural lawmakers to support anti-hunger programs that were, at that time, used mostly by the urban poor like the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps.

Nutrition programs, the largest of which is SNAP, comprise 84% of all mandatory spending in the Farm Bill today. The other biggest spending areas are crop insurance (6%), commodity programs (5%) and conservation programs (4%). The remaining 1% includes trade, rural development, research, forestry, energy, livestock and horticulture/organic agriculture.

The projected price tag for the next Farm Bill is $1.3 trillion over 10 years, a substantial increase over 2018’s projected cost of $860 billion over 10 years. If that comes to pass, it will mark the first time in history that a Farm Bill exceeded $1 trillion.

Today’s Priorities

Components of the Farm Bill change every time the bill is re-written, but usually in an evolutionary way rather than a revolutionary one. Today, the commodity programs provide specific forms of income assistance, without interfering with the market, and are compatible with our free trade goals and obligations under the World Trade Organization. Crops covered include corn, soybeans, wheat, cotton and rice; dairy, peanut and sugar producers also have programs.

The primary ag risk management focus is taxpayer-subsidized crop insurance, a tool that farmers in all 50 states can use to cover up to 120 crops in the case of weather and financial disasters. Meanwhile, SNAP helps 41 million low-income Americans afford groceries, and the Women, Infant and Children’s program and school breakfast and lunch programs assist many more.

While the bill still funds conservation programs for land retirement programs like the Conservation Reserve Program, it gives much more emphasis on working lands programs designed to help protect the environment.

It’s much too early to know the outcome of the 2023 Farm Bill, but we do know some things that will affect those decisions:

  1. The midterm election in November 2022 could change party control in both chambers of Congress. With current polling suggesting Republicans will likely win back the House and possibly the Senate, control of the chambers’ agricultural committees could change. A shift in power could mean a major adjustment in what the bill funds, such as agriculture versus nutrition or sustainability policy. Geography will also play a role, with members of Congress from different regions of the country prioritizing different farm policies due to the key commodities in their respective states or districts.
  2. Most farm groups are already lobbying for more funding for the next Farm Bill’s safety net, arguing that the support prices are far too low given current high commodity prices. That funding won’t be easy to attain, but it’s not impossible. The overall funding amount in the new bill will largely determine if this one is evolutionary or revolutionary.
  3. Expect efforts to increase conservation funding to address sustainability and climate change. It will be important that any new conservation or sustainability programs are voluntary for farmers and equitable across regions and crops. It’s also key that farmers who already employ these practices are rewarded for early adoption and not left out of new programs.

The Farm Bill has considerable ramifications for farmer livelihoods, national food security and the environment. It’s been said that “if you aren’t at the table, you are on the menu.” Farmers and ranchers who are hungry for adequate risk management programs and environmental legislation that doesn’t limit on-farm economic sustainability need to be at the table.

  • The Farm Bill funds agricultural, environmental and food security programs.
  • The midterm election could dramatically change the direction of the legislation.
  • On-farm economic sustainability is at stake.