EAST PEORIA, Ill. – The way University of Illinois farm economist Jonathan Coppess sees it, there are three major hurdles farm bill committees will need to overcome in order to pass a new farm bill:

1) Their battle over reference prices; 2) their battle over Inflation Reduction Act (IRA) conservation funding versus farm bill conservation funding; and 3) Congress’ ingrained dysfunction and partisanship, particularly over the Supplemental Nutrition Assistance Program (SNAP).

“The outlook for a farm bill is cloudy. The path is rather rocky, and I don’t know-- there could be a hell of a cliff there,” Coppess said, projecting a slide of a craggy, foggy precipice behind him during his presentation at the U of I’s 2024 Farm Economics Summit in East Peoria on Jan. 10. “That’s kind of where we’re at with the farm bill in one little snapshot.”

At the time of Coppess’ remarks, passage of a new farm bill (the 2018 Farm Bill had been extended after Congress failed to pass a 2023 bill prior to Jan. 1) was still on the back burner as lawmakers scrambled to extend the federal budget before Jan. 15. Once the budget issue is solved, Coppess said, a new farm bill will have been no closer to passage.

As for the reference price issue, Coppess detailed how Congress is divided on raising reference prices used to calculate certain crop insurance claims, as directed by the farm bill. 

“There is persistent demand from some sections in agriculture to increase reference prices,” said Coppess, who has served as an adviser during federal farm bill negotiations in the past. “Corn, soybeans and wheat will see their reference prices increase. You may ask what we are fighting about. Apparently, the reference prices within the statute for rice, peanuts and cotton are so high they don’t get to see the increase automatically, and they feel like they’re somehow not getting a fair shake.”

U of I economists estimate it would cost the government and taxpayers $20 billion to $50 billion in additional payments to farmers in order to change the statute to reflect higher reference prices for the commodities in question. Though the Congressional Budget Office (CBO) has yet to weigh in with its estimate, the amount in question is more than enough to spark dissension among farm bill committee members who question how to offset that potential expenditure staying within the allotted farm bill budget (which the U of I projects at $1.4 trillion over 10 years).

The House Agriculture Committee has indicated it would consider deep cuts to both SNAP and the farm bill’s conservation title funding as a method for offsetting the additional cost of raising reference prices for all commodities. This leads to what Coppess called the second biggest impediment to farm bill passage: a move to greatly slash or eliminate conservation funding due to temporary, unprecedented funding of United States Department of Agriculture conservation programs such as EQIP or CSP established via the federal IRA of 2022.

“What Congress did (through the IRA) was basically invest another $17 billion or $18 billion in conservation assistance to farmers, which should help alleviate some of the backlog (of USDA program applications). Our rough estimate is that around $500 million is directed to come into Illinois for conservation assistance for farmers through IRA funding,” Coppess said. 

“There is a political question to this. The IRA was passed on purely Democratic votes, and no Republican voted for it, so now it has a distinctly partisan flavor to it. It includes assistance for trying to address things like climate change. Of course, the House has flipped from Democratic control to Republican control and the partisanship has gotten more intense. Creating more partisanship in the farm bill makes it harder to get it through a Congress that so far hasn’t proven to be exactly functional,” he added. 

The House Agriculture Committee is threatening to cut as much as $50 billion from the conservation and nutrition titles of the farm bill, Coppess reported, in order to cover anticipated costs of raising reference prices. However, with current House dysfunction and a narrow, two-seat advantage over Democrats, the Committee’s version of the 2023 Farm Bill may not survive the full House vote.

“This is not a recipe for success, and if it were to pass it would be dead on arrival in the Senate and won’t be signed by the president. I don’t know how many times they’ve got to touch the stove before they learn it’s hot,” said Coppess, before offering a path toward farm bill completion and passage.

“If there is a path, this is what it might look like: In January and February we’ve got continuing resolutions problems – we’ve got to fund the government or get shut down again. Once we clear that hurdle in March and April, this becomes a key time frame for the House Agriculture Committee to most likely try the mark-up (of the farm bill). If they can get something done in that March-April time frame, we might have a shot,” he said.

“Of course, the new (CBO 10-year) baseline will come out and they’ll have to get ahead of that or eat that (anticipated) additional spending. Next, we go to the Senate, and maybe there’s a May-June possibility there. If not, by the time we get to July and the crazy campaign season…it’s over by the August recess. And don’t expect things to happen in September or October.”

What could result in this extreme case? Depending on results, a post-election, lame duck session could produce a farm bill, according to Coppess.