WASHINGTON (DTN) -- Nearly $10 billion in immediate economic aid to farmers could be lost because House Republican leaders oppose how Democrats came up with the money for the aid.
Leaders of the House and Senate Agriculture committees, along with farm-state allies, are trying to craft a plan that would provide payments to producers who are suffering from low prices. The payments would be tied to a one-year extension of the farm bill, which is expected to be included in a final bill that would extend government funding until March as well as fund a disaster-aid package.
Congress is trying to get all of this done before the current funding bill for the government expires Dec. 20.
The plan to provide economic aid comes with a whole host of divisions within the ranks and chambers.
Staff for Sen. Debbie Stabenow, D-Mich., the retiring chairwoman of the Senate Agriculture Committee, found a way to move the conservation dollars from the Inflation Reduction Act (IRA) into the baseline for the farm bill. It would generate a one-time savings of $10.7 billion, the Congressional Budget Office concluded. Stabenow then pitched her plan to the other three key committee leaders in Agriculture for the House and Senate -- the "four corners."
"I said, let's take the majority of that and put that into a package for farmers immediately," Stabenow told DTN. "This would go out before the 2025 planting season. It would go out right away."
The economic aid would be on top of an ad-hoc disaster aid package pitched by President Joe Biden in November. The president's package, $98 billion total, called for $23 billion for USDA to cope with natural disasters in 2023 and 2024, including hurricanes and wildfires. Roughly $21 billion in that package would go to farmers hit directly by natural disasters.
The $10.7 billion is essentially double an earlier proposal by Democrats earlier this month.
Stabenow said she thought other lawmakers would back the plan because it was completely paid for using the IRA dollars. She also emphasized those funds would then add to the baseline funding for the next farm bill as well.
"This is all paid for and it puts $20 billion into the permanent baseline for the future farm bill," she said.
Combined, the overall plan pitched by Democrats would provide $8.84 billion in direct payments to farmers nationally. Farmers in Texas would receive a combined $1 billion, according to details provided to DTN by a congressional staffer. Farmers in Iowa and Kansas would receive $850 million or more.
The plan also provides more than $1 billion in crop insurance rebates to farmers nationally to help producers who do not grow the main commodity crops.
With some of the other money, Stabenow also wants to create permanent funding for a couple of "orphan" programs -- those without permanent baseline dollars such as the Foundation for Food & Agriculture Research (FFAR) and an urban farming office in USDA.
The problem, however, is some key Republican agricultural leaders want more money for direct aid to farmers. House Agriculture Committee Chairman Glenn "GT" Thompson, R-Pa., wants $15 billion in the package.
Senate Agriculture Committee Ranking Member John Boozman, R-Ark., has been talking for months about providing an economic relief package through Congress. "So, if I've got anything to do with it, that's the direction we would like to go but it's a matter of working with everybody to get a plan that everyone can live with," Boozman told DTN.
Boozman declined to get into specifics about proposals on the table. "So far we have chosen not to negotiate through the press, but we're in the process of working with the leadership and see what we can get through the House," Boozman said. He added, "We finally in the last week or so ... we started to see some proposals from the other side."
One of the problems with the Democratic proposal is that House leaders oppose it. At least some House Republicans don't want to see those IRA dollars rolled into the farm bill and used for economic aid. Republicans want to "claw back" as much of the IRA money as possible when they take over next year. Stabenow's plan not only protects IRA dollars for conservation, but it allows House and Senate Agriculture committees money for both aid and the next farm ill.
Politico reported on Wednesday that House Speaker Mike Johnson, R-La., opposes using the IRA money in a one-year extension of the farm bill. Johnson has told agricultural leaders that a majority of the Republican caucus in the House opposes taking the IRA money to beef up the farm bill and provide aid money to farmers. Johnson instead wants a "clean" one-year extension of the farm bill with no added economic support to producers.
"The risk right now is that nothing comes together and we just do a one-year extension, and I worry that's where we're headed," Stabenow said.
Much of the Democratic proposal is based on the bipartisan Farmer Assistance and Revenue Mitigation Act of 2024 (FARM Act) by Rep. Trent Kelly, R-Miss., which has 50 co-sponsors, most of whom are Republicans.
Stabenow noted the plan she proposed provides more money to farmers immediately than the current Agricultural Risk Coverage and Price Loss Coverage (ARC and PLC) would ever pay out to farmers in a given year.
"This is very impactful and farmers need the help now," Stabenow said. "And we want to grow the baseline and the only way to grow the baseline is to take the conservation money and put it into the baseline."
Sen. John Hoeven, R-N.D., said he also would like to see a disaster aid package that ties into increasing the baseline for the farmers. Hoeven's idea looks at building ad-hoc disaster aid funds into mandatory programs as well. Hoeven wants to develop a disaster program similar to what USDA used in the first Trump administration, the Wildfires and Hurricanes Indemnity Program (WHIP).
"Forty eight states had some level of drought. So it's not just the hurricanes," Hoeven told DTN. "There's a real need now that it would address. That's important, but getting that into the baseline it would be a two-for-one. Think about that farmer. He's not going to get enough to get squared away now, but he's got a better shot if he knows he's going to have a farm bill with updated reference prices for ARC and PLC and more affordable crop insurance."
Pressing the issue, Rob Larew, president of the National Farmers Union, on Wednesday also highlighted the need for Congress to come together on economic aid. Larew has been traveling the country in recent weeks visiting NFU members at their state meetings.
"I've spent the past several weeks speaking directly with Farmers Union members across the country, and they have made one thing crystal clear: Congress must take action to provide immediate relief for farmers and ranchers," Larew said. "Family farmers and ranchers are grappling with the aftermath of natural disasters, volatile commodity prices, high input costs and declining net farm income. With Congress indicating that it will not pass a renewed five-year farm bill before the end of the year, it is even more essential to provide substantive assistance to commodities impacted by current economic challenges."
Chris Clayton can be reached at Chris.Clayton@dtn.com
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