Farm Bill Negotiations Begin While Farmers Eye Tariffs

Jul 23, 2018

Farm Bill negotiations have begun between the U.S. House and Senate.

The Farm Bill is a multi-year law that governs food programs and agricultural policy. It’s renewed roughly every five years. The last Farm Bill was drafted in 2014.

The House and Senate will have to agree on a final version before the current bill expires at the end of September.

Illinois is home to more than 70,000 farms, which will be affected by this bill in some way.

Steve Safford is a hog farmer in DeKalb County, working on the same land his great grandfather bought in the late 1800’s. His father started focusing on pork production. Safford said he remembers when earlier versions of the Farm Bill were passed, without much alteration to his farm. He hopes the new bill won’t bring significant change.

“We’ve got a lot of programs now that address a lot of needs so I would probably say leave it as is,” he said.

Safford is more focused on trade than legislation at the moment.  

The Illinois Farm Bureau estimates that the state produced nearly $8 billion worth of agricultural exports in 2016; six percent of the total amount of U.S. agricultural exports. China, Canada and Mexico are the leading export markets for the state. 

President Trump’s trade actions have caused retaliatory tariffs that have affected these exports. Chinese-imposed tariffs on a bevvy of agricultural products, especially on pork, have been highly scrutinized. Safford is among the critics.

Corn prices per bushel are on a decline. According to this graph, corn costs $3.5125 per bushel, as July 19, 2018.
Credit Macrotrends

“Tariffs are a bad idea from the get-go," he said. "They can do significant damage to the agricultural industry--well, already have, actually. We’ve seen a real slump in grain prices. They have the potential to do damage to the hog market because a significant amount of our product is exported these days.”

Safford said the hog industry sinks or swims on its own, independent of much government support programs. He said the industry’s main income comes from foreign exports.

“You start tinkering with that, it’s a recipe for lower prices," he said, "and that’s what’s happening.”

Safford said his hog farm has participated in subsidy programs before. Throughout the different farm bills, Safford says the biggest changes come with food security programs.

Soybean prices are declining. According to Macrotrends, as of July 19, 2018, the current price per bushel is $8.4600.
Credit Macrotrends

“Probably one of the biggest changes is the addition of the Supplemental Nutrition programs. And that’s of course a political move so that you get non-farm legislators to vote ‘yes,'” he said.

Northern Illinois Food Bank spokesperson Teresa Schryver said the Supplemental Nutrition Assistance Program, or SNAP, is the first line of defense when providing nutritious meals to families in need.

“SNAP often times does not provide enough to get a family through an entire month. And often times its only about three weeks’ worth of groceries. And so that last week there’s a need for another place to get enough groceries for their family. So that’s where our food pantries and soup kitchens and food sites come into play,” she said.

Schryver says they serve more than half a million people per year. 1.8 million people in Illinois participate in SNAP.  

“Northern Illinois Food Bank serves thirteen counties. About half of us are rural and half of them are more suburban,” she said.

The Emergency Food Assistance Program and agriculture surplus programs are also part of the Farm Bill that affects the food bank, according to Schryver.

“Of course we’d love to see something that’s more effective. We’ll always be there to help fill the gaps either way,” she said.

The House version of the bill includes changes to the SNAP work program. Currently, if a SNAP recipient is a certain age, they have to work at least 20 hours a week to stay eligible for benefits. The House bill includes changes that will require more people to be part of this work program, and they’d have to work longer hours. If they don’t, recipients could potentially be taken off the program.

“We definitely were concerned with the House version. The Senate version was something we were behind. It kept SNAP intact, without making any changes to the work requirements. And that was one that we fully support. And we do hope that as the conference for the bill is going forward, that it does come out looking more like the Senate version than the House version,” she said.

The Farm Bill also includes policies about insurance rates and government subsidy programs. It could bring broadband internet to rural communities and change health care coverage for farmers.  

Scott Newport is a Farm Business Specialist with Illinois Farm Business Farm Management. He works with around 120 farmers in Illinois. Newport says it’s too early to be concerned about the new Farm Bill, since it’s still in the negotiation stage. He says many farmers wouldn’t mind if the 2018 bill resembles the 2014 Farm Law.

“If it maintains the same provisions for risk management that exist in the last bill, then it probably wouldn’t be a problem at all. I mean, I think it’s something that producers won’t take issue with, in general,” said Newport.

Newport says that tariffs are an important discussion, but the Farm Bill won’t affect on the foreign market.

“I don’t think there’s anything in the Farm Bill that necessarily reflects changes in trade policy,” he said.

Rep. Cheri Bustos (D-Illinois) announced in a statement last week she was appointed to the Farm Bill Conference Committee to help merge the two bills. Illinois Republicans John Shimkus and Rodney Davis also are part of the committee.

Bustos said northern and central Illinois are where some of the “hardest working” farmers are located.