An Update From the Political Front

Written by: Andy Martin, Legislative and Public Affairs Officer

Members of Congress continue the work of crafting the next farm bill. With the current bill set to expire on September 30, the House and Senate Agriculture committees have been holding frequent informational hearings. Individual members are hosting listening sessions in their districts, working on legislative proposals, and submitting ideas to the committees for possible inclusion in the final bill.

However, no legislative text of a comprehensive bill exists nor has any announcement about a framework of an agreement by legislative leaders been released. While this may sound concerning, those familiar with how farm bills are developed and how Congress operates would say the process is playing out as expected.

Several issues have prevented farm bill writers from making rapid progress on the legislation. The first issue was recently settled as part of the debt limit deal that was reached in early June. Debt limit negotiators chose to include reforms to the Supplemental Nutrition Assistance Program (SNAP), specifically work requirements related to program eligibility, which should allow farm bill writers to move forward with that issue having been settled outside of the Agriculture committees.

A second issue that remains unsettled is whether the Agriculture committees will get additional funding from Congressional and Budget Committee leaders. Tackling issues that many farm organizations have called for, such as increasing reference prices under Price Loss Coverage (PLC) and adding support for higher levels of crop insurance coverage, will be very difficult without additional budget resources.

Congress continues to work in earnest to complete the next farm bill. From the Agriculture Committee chairs and ranking members to House and Senate leadership, to President Biden, all have said they want to get the bill done. In fact, the committee leaders met privately with President Biden and Secretary of Agriculture Tom Vilsack in May to discuss the bill. Of course, that doesn’t guarantee the bill will be completed by September 30. Recent history shows that farm bills are challenged to be finished on time. In fact, the last time a farm bill was completed without the use of an extension was in 1990.

The Farm Credit System is working with Congress to enact a farm bill that maintains a strong farm safety net for producers, including a strong federal crop insurance program.

Additionally, Farm Credit encourages Congress to support rural communities and agriculture by:

- Increasing the loan limits on Farm Service Agency Direct and Guaranteed Loan programs to better reflect the increasing costs of purchasing land and operating farms and ranches.

- Strengthening rural water systems by ensuring that Systems’ existing water lending activities are available in communities eligible to receive USDA-guaranteed water loans.

- Promoting U.S. ag exports by increasing the amount of export financing Farm Credit System Funding Banks are allowed to provide.

- Boosting development of vital rural community facilities (hospitals, rural clinics, skilled nursing facilities, etc.) by clarifying Farm Credit institutions’ authority to invest in rural community facilities projects and encouraging partnerships on these projects with community banks.

- Expanding access for rural businesses to equity capital investment by eliminating unnecessary restrictions on Rural Business Investment Companies (RBIC) and allowing RBICs to access federal leverage funding, like how small business investment companies operate.

We will continue to monitor developments and work with other agriculture organizations in a unified manner to engage with Congress, using the power of our cooperative’s 25,000 members to amplify the voice of agriculture and rural communities.

AgCountry advocacy efforts extend to state policy and the work of the legislative bodies in Minnesota, North Dakota, and Wisconsin. Here are a few significant agriculture items coming from the state capitols in our territory.

The new Fiscal Year 2024-2025 agriculture funding includes:

- $10 million to start a grain indemnity fund, which would offer farmers protection in the event of an elevator bankruptcy. Farmers will pay premiums when the fund dips below $8 million unless they choose to opt out of the program.

- $4 million to reestablish the Dairy Assistance, Investment, Relief Initiative (DAIRI) program, which will provide grants to small and mid-sized dairies for enrolling in federal risk protection.

- $750,000 to expand the biofuels infrastructure grant program.

- $300,000 for additional staff at the Rural Finance Authority, the state’s main agricultural lending agency.

The comprehensive tax bill includes:

- An extension of the Beginning Farmer Tax Credit and an expansion to allow family members of beginning farmers access to the program.

- Increasing the first-tier property valuation exclusion for agriculture homesteads limit from $2.15 to $3.5 million to reflect increasing land values.

- The corporate farm law was updated. Changes are intended to encourage more animal agriculture, specifically feeding and dairy, by allowing corporations of 10 members or less to own up to 160 acres for animal facilities.

- A new grant program was created to assist counties and regional councils in strategic planning and accommodating investments in livestock production. It will be administered by the Ag Department.

- Individuals from foreign countries, except Canada, will be prohibited from purchasing ag land in North Dakota. There are exceptions for purchases up to 160 acres for research, testing, and development.

- The tax bill eliminated income tax for married couples making less than $74,750 and lowered the other tax rates to 1.95% for married couples between $74,750 and $275,100 and 2.5% for all others earning more than that. The current highest rate is 2.9%.

The Joint Committee on Finance recently completed its work on the Department of Agriculture, Trade, and Consumer Protection (DATCP) budget. The language will be sent to both the Assembly and Senate for further consideration. The aim is to have a budget completed by June 30. The Joint Committee on Finance approved the following in the DATCP budget:

- $1 million annually for the Wisconsin Initiative for Agricultural Exports.

- $1 million annually for the Producer-Led Watershed Protection Grant Program.

- $1 million annually for the Nitrogen Optimization Grant Program.

- $800,000 annually for the Cover Crop Insurance Premium Rebate Program.