Agriculture Funding in the Bipartisan Budget Act of 2018

Agriculture Funding in the Bipartisan Budget Act of 2018

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February 16, 2018
Agriculture Funding in the Bipartisan Budget Act of 2018
On February 9, 2018, Congress passed the Bipartisan
Fish (ELAP) was amended to remove the $20 million
Budget Act of 2018 (P.L. 115-123), which broadly
annual mandatory funding cap; effectively authorizing such
authorized supplemental appropriations, including for crop
sums as necessary from mandatory funding sources. The
and livestock losses from the 2017 hurricane season and
Tree Assistance Program (TAP), which pays to replant or
wildfires. The act also revised several existing agriculture
rehabilitate trees, bushes, and vines damaged by natural
programs, which has long-term policy implications because
disasters, was amended to increase the individual limit from
it changed farm bill statutes. This report discusses four of
500 acres to 1,000 acres. Payment limitations of $125,000
the changes and accounts for all agriculture-related funding
per crop year for TAP and LIP were also eliminated. All
in Table 1 (excluding the FY2018 continuing resolution for
amendments apply retroactively to losses incurred on or
general agricultural appropriations). The act adds $3.6
after January 1, 2017. In total, the Congressional Budget
billion of disaster assistance in FY2018, adds $1.4 billion to
Office (CBO) projects the cost of these changes to be $240
the 10-year farm bill baseline, and offsets an estimated $2.6
million over 10 years.
billion from agriculture by extending sequestration two
more years through FY2027.
Treatment of Seed Cotton
Section 60101(a) amends the 2014 farm bill to add seed
Block Grants for Agricultural Losses
cotton as a “covered commodity,” making cotton eligible
Title I, Division B, provides $2.36 billion to the Secretary
for farm commodity programs such as Price Loss Coverage
of Agriculture to cover crop, tree, bush, and vine losses
(PLC). Cotton had long been a covered commodity, but was
from 2017 hurricanes and wildfires that were not covered
removed by the 2014 farm bill in order to comply with a
under the Federal Crop Insurance Program (crop insurance)
World Trade Organization dispute settlement. CBO projects
and the Noninsured Crop Disaster Assistance Program
the cost of adding seed cotton as a covered commodity to
(NAP). Assistance is through block grants to eligible states,
be $3 billion over 10 years; however, budget offsets—
as determined by the Secretary. Historically, assistance for
including reallocating farm program payment acres back to
production losses has been provided directly from the U.S.
cotton, and repealing eligibility for the cotton stacked
Department of Agriculture (USDA) to eligible farmers and
income protection revenue insurance plan (created under
ranchers. It remains to be seen whether the requirement to
the 2014 farm bill) by cotton producers that participate in
implement this assistance through states may add
Title I revenue support programs—are projected to lower
complexity for participants or delay implementation.
the net cost to $62 million. These changes, along with
changes to the disaster and dairy programs described below,
The new program limits payments to no more than 85% of
become part of the baseline to write the farm bill.
losses, including payments from crop insurance and NAP.
For producers who did not purchase crop insurance or NAP
Dairy and Livestock Program Changes
in advance of the natural disasters, payments are limited to
Section 60101(b) amends the 2014 farm bill for the Margin
65% of losses. All participants are required to purchase
Protection Program (MPP) for dairy producers based on the
crop insurance or NAP for the next two years.
difference between milk price and feed cost. It raises the
default, or catastrophic, protection (from $4 per
Because crop insurance and NAP are federally administered
hundredweight (cwt) to $5 per cwt), and raises the eligible
programs, data needed to calculate payments under the
production level for reduced margin premiums from 4
block grants are not currently available to states. Also,
million pounds to 5 million pounds. It also lowers the
covering the losses of farmers who chose not to purchase
premium cost for margin coverage under 5 million pounds.
insurance, as well as those who did, has the potential to
MPP payments will be based on monthly instead of a two-
create a moral hazard for future participation. It is unclear
month average margin. The act extends MPP enrollment for
whether the new program duplicates payments under other
2018, and eliminates fees for beginning, veteran, or socially
existing disaster programs (e.g., Tree Assistance Program
disadvantaged producers. The CBO score of the provision
and Livestock Indemnity Program) that were not mentioned
is a cost of $794 million over 10 years.
specifically under the 85/65 loss coverage limitation.
Separately, Section 60101(c) removes the $20 million cost
Amended Permanent Disaster Programs limitation on the livestock gross margin (LGM) insurance
Section 20101 amends select permanent disaster assistance
programs. LGM allows cattle, dairy, and swine producers to
programs through expanded coverage and funding levels.
manage price risk by insuring their margins (market value
The Livestock Indemnity Program (LIP), which makes
minus feed costs), though dairy producers are prohibited
payments for livestock losses in excess of normal mortality,
from participating in both MPP and LGM. In 2016, dairy
was amended to include losses from selling livestock at a
producers represented 93% of LGM liability. CBO projects
reduced price due to adverse weather. The Emergency
the cost of removing the cap to be $308 million over 10
Assistance for Livestock, Honey Bees, and Farm-Raised
years.
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link to page 2 Agriculture Funding in the Bipartisan Budget Act of 2018
Table 1. Funding for Agriculture in the Bipartisan Budget Act of 2018
(Budget authority in millions of dollars)
Program
FY2018
FY2018-FY2027
Disaster Assistance (Division B)

Block grants for agricultural disasters
2,360.0
2,360.0
Purchase requirement (2 yr.) for crop insurance
0.0
68.0
Watershed and Flood Prevention Operations (Emergency Watershed Protection)
541.0
541.0
Emergency Conservation Program
400.0
400.0
Rural Water and Waste Disposal Program
165.5
165.5
Agricultural Research Service, Buildings and Facilities
22.0
22.0
Commodity Assistance Program (food assistance)
24.0
24.0
Rural Housing Insurance Fund
18.7
18.7
Nutrition Program for Women, Infants, and Children (WIC, infrastructure repairs)
14.0
14.0
Food and Drug Administration, Buildings and Facilities
7.6
7.6
Office of Inspector General
2.5
2.5
Subtotal, disaster assistance
3,555.2
3,555.2
Other disaster assistance through changes to the farm bill (Division B)

Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish program (ELAP)
30.0
156.0
Tree Assistance Program (TAP; 1,000 acre limit, no cap)
7.0
52.0
Livestock Indemnity Payments (LIP; allow losses from reduced sales price)
3.0
21.0
Payment limitation removed on TAP, LIP
2.0
11.0
Subtotal, Division B effect on farm bill budget
42.0
240.0
Improvements to Agriculture Programs (Division F)

Seed cotton as covered commodity
0.0
2,961.0
Reallocate generic base acres
0.0
-2,188.0
Effect on Stacked Income Protection Plan (STAX)
0.0
-711.0
Subtotal, seed cotton
0.0
62.0
Dairy Margin Protection Program (MPP)
47.0
794.0
Eliminate limit on Livestock Gross Margin (LGM) insurance program
0.0
308.0
Subtotal, dairy
47.0
1,102.0
Subtotal, changes affecting the farm bill baseline
89.0
1,404.0
Total additions (Division F&B)
3,644.2
5,027.2
Offsets affecting agricultural programs

Extend sequestration two more years through FY2027 (Division C, Sec. 30101(c))
0.0
-2,600.0a
Total, Agriculture
3,644.2
2,427.2
Source: CRS, compiled from P.L. 115-123; and CBO, “Cost Estimate for the Bipartisan Budget Act of 2018.”
a. Accounts in Agriculture appropriations are reduced by $1.3 billion of sequestration in FY2018 (OMB, “Report to the Congress,” May 23,
2017). This amount was used to estimate the two-year Agriculture share from extending sequestration.

Jim Monke, Specialist in Agricultural Policy
Megan Stubbs, Specialist in Agricultural Conservation and

Natural Resources Policy

IF10829
https://crsreports.congress.gov

Agriculture Funding in the Bipartisan Budget Act of 2018

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