What’s holding up the Farm Bill?

Editor's note: This column was included in the Aug. 15 version of The Pulse, a weekly BankBeat newsletter sent to subscribers..Approximately six weeks remain until the current version of the farm bill expires. Though Congress could extend the current version of the bill for another year before it expires on Sept. 30, it should instead pass a new, longer-term package as the farm economy remains in a precarious position. .Several changes floated as part of the proposed bill would benefit farmers and community bankers. The farm bill, which is expected to cost $1.5 trillion over 10 years, would also increase safety net payments for commodity crops, expand disaster assistance eligibility and increase funding for specialty crops, dairy farmers and organic farmers..Though the House Ag Committee passed the farm bill in May by a 33-21 vote, it still needs to pass through the full House of Representatives and Senate before being sent to a conference committee. Last November, Congress opted to extend the current farm bill until November 2024, but ag conditions have since worsened as record rainfall in Minnesota and the Dakotas has combined with falling commodity prices to worsen outlooks. The U.S. Department of Agriculture projects a $43 billion (27 percent) drop in farm income following a 19 percent decrease from 2022-23. .Testifying last month before the House Ag Committee, Minnesota Corn Growers Association President Dana Allen-Tulley said corn farmers face an average loss of $150 per acre if prices remain as is, and farm debt is expected to reach a record high by the end of the year. Allen-Tulley predicted farmers will have trouble securing the necessary cash flow for loans without an updated farm bill, which would harm both farmers and the community bankers who finance their operations. .Congress must move faster to account for the urgency of this situation. Democrats and Republicans both support an updated farm bill. Speaking last month during the House Ag Committee meeting, Chair Glenn Thompson (R-Pa.) said he is open to renegotiating the bill with Democrats who want it to pass this year. "It is clear that we need to come together on a farm bill that strengthens the farm safety net, and we are going to do it together," added Rep. David Scott (D-Ga.). Rep. Tracey Mann (R-Kan.) called for the passage of a "comprehensive" five-year farm bill that protects and strengthens crop insurance..This leaves me optimistic that a new farm bill will pass this year and bring relief to the many farmers grappling with the weakened economy. Still, Congress likes to wait until the last moment to pass important legislation, or 'kick the can down the road' to skirt deadlines entirely. That can't happen this year. Farmers — and the community bankers who fuel the rural economy — will not be able to afford the consequences.