Our View: Farm bill provides stability in uncertain times

December 21, 2018 GMT

The 2018 farm bill that awaits President Donald Trump’s signature provides farmers with policy certainty in an environment awash with risk. The president ought to sign the legislation to reward farmers and rural voters who overwhelmingly supported him in the 2016 general election.

The Agricultural Improvement Act of 2018 will disappoint farmers who wanted meaningful policy reforms and taxpayers who want their money more efficiently spent. However, it was unrealistic to expect that from a lame-duck Congress fractured by partisan bickering.

The legislation does nothing to correct an incredible flaw contained in the 2014 law. Farmers will continue to receive less taxpayer money in bad economic times and more when markets are better.

However, there is much to like about the legislation. The Dairy Margin Protection Program — designed to help producers struggling with low milk prices — is better targeted to help small- and mid-size herd owners.

The crop insurance program, which protects farmers from weather disasters, is mostly unchanged. The program saves taxpayers in the long run because it makes ad-hoc appropriations to offset weather disasters mostly unnecessary.

Farmers who cannot plant crops due to weather will have the opportunity to receive conservation payments on the impacted land if they agree to plant grasses on it.

Congress avoided a huge mistake when it backed away from eliminating the Conservation Reserve Program, which is credited with protecting water quality. For the most part, conservation efforts received modest funding increases.

However, bill writers fumbled an opportunity to boost the Conservation Reserve Program, which is designed to take fragile land out of crop production. The program, which provides farmers with annual payments to retire land, will increase enrolled acres from 24 million to 27 million.

Congress also acted to increase loan rates through the Commodity Credit Corporation. The CCC loan program provides credit-needy farmers with short-term operating loans. The loan collateral is bin-stored, unsold grain. The loan rate for corn is increased from $1.95 per bushel to $2.20; from $5 for soybeans to $6.20; and from $2.94 per bushel for wheat to $3.38.

The legislation does little to make taxpayers’ dollars go further by taking no action to limit federal payments to farmers who need help. Farmers with adjusted gross annual income of $900,000 or more won’t be eligible to receive program payments.

Reformers will have to wait. The measure that awaits Trump’s signature is a continuation of the status quo.

Federal farm programs were initiated during President Franklin Roosevelt’s administration in the 1930s for the purpose of ensuring a bountiful supply of food while keeping families on farms.

Programs have been adjusted in the intervening years with mixed results. The farming population has declined to less than 1 percent; Consumers spend less of their disposable income on food purchases in the United States than elsewhere.

It would be wrong to say U.S. farm policy has been successful. The 2018 bill is perhaps the best that could have been hoped for. President Trump should sign the legislation to provide farmers a small measure of certainty in a business environment drenched in risk.