Farm policy update: Where we stand after the Senate Ag Committee Farm Bill markup

Sanaz Arjomand

On Friday, June 8, Chairman Roberts and Ranking Member Stabenow of the Senate Agriculture Committee released the Agriculture Improvement Act of 2018, also referred to as the Chairman’s mark. The bill was discussed and amended (i.e., marked up) in committee on June 13, with 66 amendments included in the en bloc manager’s amendment, and an additional eight amendments passed separately.  The bill was reported out favorably 20-1, with Senator Chuck Grassley of Iowa casting the sole “no” vote over lack of reforms to commodity program payment limits.

This bill is an important legislative step towards passing a 2018 Farm Bill to replace the current legislation, which expires on September 30th. Senate Majority Leader Mitch McConnell, who also served on the Senate Agriculture Committee, vowed to take up the bill on the Senate floor before the week long Congressional recess beginning July 2.

During this Farm Bill cycle, American Farmland Trust’s focus has been on changes to key programs that deliver on its mission to protect farmland, promote environmentally sound farming practices, and keep farmers on the land.

This blog post compares AFT’s priorities for the 2018 Farm Bill to the Senate Farm Bill passed out of Committee. AFT priorities that are included in the bill are noted with a (✓), and items that are partially or not at all included are noted with a (—). Items discussed in this post that were not on AFT’s list of priorities are marked by a (#).

For a comparison of the House Farm Bill to AFT’s priorities, please click here.

Protect FarmlandAgricultural Conservation Easement Program 

The Agricultural Conservation Easement Program (ACEP) is a critically important voluntary federal conservation program implemented by the USDA Natural Resources Conservation Service that protects agricultural land and conserves wetlands. The ACEP-Agricultural Land Easement (ACEP-ALE) program cost-shares with state and local partners to purchase agricultural conservation easements from farmers, ranchers and agricultural landowners. The program permanently protects land from sprawling development while keeping it in agricultural production. Importantly, it enables farmers and ranchers to reinvest the proceeds of the easement sale in their businesses, to transition land to the next generation, or to improve their stewardship.

ACEP Funding: —

AFT’s top priority for the coming Farm Bill is to ensure funding for ACEP at $500 million per year. If the program remains at its exceptionally low $250 million baseline, USDA estimates that 93% of farmers and ranchers applying for funds would be turned away. AFT commends the Senate bill for providing important additional funding—$400 million for the first three years of the bill, $425 million for the fourth year, and $450 million for the final year and future projections, and will continue to work with the House and Senate Committees to reach $500 million per year.

Forestland eligibility #

AFT also commends the Senate Agriculture Committee for continuing the intended use of ACEP-ALE by not including a waiver for 100% forested lands to be included in the program. This addition would be duplicative of other forestland protection programs, and would exacerbate the demand for an already oversubscribed program.  

Certification ✓

Across the country, many state and local Purchase of Agricultural Conservation Easement programs and agricultural land trusts have decades of experience protecting farmland and ranchland in their communities. This bill strengthens the ability of these experienced entities to use their own deed terms to meet the needs of local producers through the certification process. It also includes a streamlined process through which experienced land trusts and state programs qualify for certification.

ALE Plan ✓

This bill removes the requirement to have an ALE plan (a document meant to guide producer practices) from the permanent, legally-enforceable deed terms, which is helpful for avoiding future legal headaches as production practices on eased land change over time. Instead, an ALE plan that describes potential conservation practices is a condition on assistance (i.e. pre-requisite) for the program, and more specific conservation plans are required only for highly erodible land or for grasslands of special environmental significance. AFT will continue to work with the Committee to ensure that ALE plans are not unnecessarily burdensome and duplicative of other state conservation requirements.

Contingent Right of Enforcement 

The bill clarifies the Secretary’s contingent right of enforcement, assuring landowners that they won't undergo additional inspections by USDA if the easement holder is properly monitoring and enforcing the easement and reporting to USDA.

Cash Match ✓

In many states and counties around the country, PACE programs serve as an invaluable resource and cash match for farmers seeking to use ACEP-ALE funds. However, in areas with no public program or limited funds for farmland protection, the removal of the cash match requirement in the bill means that farmers and ranchers who are willing to donate more of their easement value can move forward in permanently protecting their land through ACEP-ALE. Rather than requiring a specific amount of cash contribution, a combination of landowner donation, easement costs (e.g. appraisal, survey, inspection, and title), and other sources as determined by the Secretary are allowed.

Adjusted Gross Income Limitation —

By keeping ACEP-ALE subject to the Adjusted Gross Income (AGI) limitation, this bill limits opportunities to protect farmland and ranchland, based on the situation of a landowner at a given moment in time. The Senate bill decreases the limit for AGI from $900,000 to $700,000 and does not remove the limit or add a waiver for ACEP-ALE.

Buy-Protect-Sell ✓  

By using buy-protect-sell, a land trust may step in to purchase a piece of property and protect it with an easement so that it can be sold to a farmer at its (typically lower) protected value. This is especially beneficial to next generation farmers, for whom access to affordable farmland is a key challenge. AFT is pleased to see this innovative practice explicitly included in the Senate Farm Bill.

Non-Agricultural Activities ✓

AFT supports this bill’s inclusion of non-agricultural activities, such as agritourism, that do not negatively impact the agricultural use of the land, as a means by which farmers and ranchers can take advantage of new income opportunities.

Ecosystem Service Markets —

The option to participate in ecosystem markets—again, so long as this does not negatively impact the use of the land for active agriculture—would also be a win-win for improving farm viability and the environment. This bill does not add an explicit allowance for such participation.

Mineral Development —

Under current law, mineral development is considered on a case-by-case basis. AFT supports the inclusion of a specific set of standards to allow mineral development on farmland. These standards are especially important to enable easement purchases in areas where subsurface mineral rights are not owned by the farmer or rancher seeking to use ACEP-ALE. 

Easement Modifications

Farming and ranching today looks different than it did in the past, and producers will continue to need to adapt their operations and practices to remain viable into the future. However, AFT is concerned that the easement modification amendment offered by Senator Thune in the en bloc amendment creates a separate and conflicting approval process for ACEP-ALE easement amendments. AFT will continue to advocate for an easement amendment process that provides flexibility for changing agricultural conditions while maintaining the sustainability of the land for agricultural production.

Promote Sound Farming Practices

Voluntary conservation programs are vitally important to farmers and ranchers who want to be good stewards of their land, and of the shared natural resources we all enjoy. A full toolbox of well-funded conservation programs, which often leverage matching funds from farmers and ranchers themselves, is important to improve environmental outcomes and to avoid the need for more stringent regulations in the future.

Maintain Conservation Title Funding:

AFT applauds the Senate Farm Bill for maintaining full Conservation Title funding for conservation programs despite the difficult fiscal environment.   

Regional Conservation Partnership Program Funding ✓

The Regional Conservation Partnership Program (RCPP) is an innovative, landscape-scale conservation program that brings many partners together to address targeted environmental issues. AFT is supportive of the $200 million of annual mandatory funding for RCPP in this bill.

Quantification of Outcomes in RCPP ✓

Importantly, the legislation makes changes to key sections of RCPP to improve the information that partners gather during their projects to show their effectiveness. The legislation now directs RCPP partners to quantify their projects’ environmental outcomes in their assessments; requires the Secretary to provide guidance to partners on how to quantify and report on environmental outcomes of their projects; and adds a requirement for the USDA to include the progress being made on quantifying and reporting of environmental outcomes to the report of the Secretary to Congress.

Funding for Baseline Measurements or Watershed Plans #

As a helpful first step towards quantifying outcomes as described above, this bill allows for the provision of some advance funding to create a watershed or habitat plan, or to establish a baseline of environmental quality from which to measure progress. 

Application Process for RCCP #

AFT supports the directive for a simplified RCPP application process included in this legislation.

Crop Insurance and Conservation Compliance

Since the first Conservation Title in the 1985 Farm Bill, conservation compliance has tied payments from the USDA to basic requirements to protect fragile landscapes (highly erodible lands and wetlands). The 2014 Farm Bill re-linked these requirements to crop insurance premium subsidies, and AFT supports the continuation of that requirement in this legislation.

Report on Absent Landlords #

This bill directs the Secretary to complete a report on the effects of absentee landlords on land valuation, soil health, and the economic stability of rural communities. AFT has recognized the importance of engaging non-farming landlords, particularly women non-farming land owners, in its conservation work through its Women for the Land initiative, which includes a non-operator landowner survey to help policy-makers, natural resource agencies, and conservation groups understand how best to work with non-operating landowners to achieve effective resource conservation.

Conservation Practices and Crop Insurance #

Within the Crop Insurance title, this bill clarifies that organic practices and conservation practices approved by the Natural Resources Conservation Service (NRCS) shall be considered ‘good farming practices’ that do not require any additional consideration for insurability purposes. The bill also specifies that cover crop termination shall not impact insurability as long as it is carried out in a manner consistent with NRCS standards.

Data on Conservation Practices #

The Senate bill contains the ideas from the bipartisan Agriculture Data Act introduced by Senators John Thune (R-SD) and Amy Klobuchar (D-MN) to improve USDA management of producer data in order to better understand the impacts of farm conservation practices on risk, yields, and profitability (while still protecting producer privacy and anonymity). This improved data management will answer important questions about the ways that conservation practices and risk management tools such as crop insurance can better work together.

Expansion of Performance-Based Discount #

In a change that would build on the data management changes above, this bill expands the ability of the USDA to offer crop insurance discounts for the use of risk-reducing practices. This would begin in the 2020 reinsurance year, with consideration of precision irrigation or fertilization, crop rotations, and cover crops as eligible for earning crop insurance discounts.

Keep Farmers on the Land

Since AFT’s founding in 1980, the average age of farmers has risen from 50 to 58. Meanwhile, the most recent Census of Agriculture in 2012 showed that the number of beginning farmers decreased 20 percent compared to the five years before. The upcoming Farm Bill includes several important avenues for helping beginning farmers and ranchers access the land that they need to start their operations, and to promote new markets to help them remain viable into the future. 

ACEP Funding —

See “Fund ACEP at a minimum of $500 million per year” above.

Buy-Protect-Sell ✓

See “Buy-Protect-Sell” above.

USDA Loans —

In addition to changes in ACEP, AFT identified two changes to USDA loans that would be beneficial to beginning farmers and ranchers—increasing the direct farm ownership loan limit to account for high farmland values, and the creation of a loan prequalification process so that beginning farmers and ranchers can act quickly and confidently when they find a property that works for their business. Through an amendment offered by Senator Klobuchar, the Senate bill increases the FSA Direct Farm Ownership loan limit to $600,000, but did not include the loan prequalification process. The amendment also requires a report to Congress on the extent to which target participation rates for beginning and socially disadvantaged farmers are being met through USDA loans.

Report on Land Access, Tenure, and Transition #

The Senate bill includes a Report on Land Access, Tenure, and Transition to study the land-related barriers to entry for beginning farmers and ranchers and to consider the extent to which federal programs including ACEP are addressing those barriers, and recommend regulatory, operational, or statutory changes that could improve beginning farmer land tenure and access. AFT believes this type of analysis is important, and a beneficial complement to the House bill’s proposed farmland data initiative and its proposed Commission on Farm Transitions.

Training Opportunities ✓

The Beginning Farmer and Rancher Development Program (BFRDP) enables agricultural service providers to educate, train, and provide technical support to beginning farmers and ranchers on a variety of topics. The program is one of the “orphan programs” with no baseline to serve as a starting point for funding in future years. In the Senate bill, BFRDP was combined with the Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers and Veteran Farmer and Rancher Program under the umbrella of the new Farming Opportunities Training and Development Program. This is funded at $50 million per year—which marks an increase of $5 million per year for BFRDP and would mean that the program would have baseline in the future.

This bill also specifies that BFRDP may be used for “ innovative farm, ranch, and private, nonindustrial forest land transfer and succession strategies” and “assisting beginning farmers and ranchers in acquiring land from retiring farmers and ranchers.” Land access is one of the most cited barriers for next generation farmers and ranchers, making these important categories for training and technical support. 

Farm Viability Grants —

This bill does not include a farm viability grant to assist organizations working with farmers and ranchers to further grow and improve their business models.

Market Opportunities ✓

According to a 2016 study, farmers engaged in direct-to-consumer marketing were between six and 10 percentage points more likely to have surviving businesses than farmers who were not. The Farmers Market and Local Food Promotion Program provides grants to organizations working to improve local food infrastructure such as farmers markets, regional food hubs and value-added production enterprises. It is another “orphan program” that lacks baseline funding to carry forward. This bill addresses that issue by again combining it, this time with the Value Added Producer Grants, with annual funding of $60 million, in the newly-created Local Agriculture Market Program.

State Agricultural Mediation Programs #

In forty states, certified agricultural mediation programs deliver mediation services that help producers, lenders, creditors, and other members of the agricultural community to resolve problems before they become more complicated and costly. AFT strongly supports the reauthorization and expansion of the State Agricultural Mediation Programs to include lease issues (including land leases and equipment leases) and family farm transitions.   

Beginning farmer and youth outreach coordinators #

Finally, this bill directs the Secretary of Agriculture to designate a National Beginning Farmer and Rancher Coordinator, as well as a State Beginning Farmer and Rancher Coordinator for each state to manage outreach and technical assistance. The bill also provides for an Agricultural Youth Coordinator to manage outreach to youth agricultural organizations and school-based agricultural education organizations. 

Moving Forward

Overall, AFT is supportive of these legislative changes, and hopes that many will be included in a timely 2018 Farm Bill. Additionally, AFT appreciates the bipartisan nature of this bill and the input from agricultural, conservation, and nutrition groups in the final outcome. AFT looks forward to working with both sides of the aisle, in both the House and Senate, as the Farm Bill moves through the legislative process.